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Influences of Internal Control on Enterprise Performance: Does an Information System Make a Difference?

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  • Hani Alshaiti

    (Accounting Department, School of Business, King Faisal University, Al Ahsa 36363, Saudi Arabia)

Abstract

It is generally perceived that the effective implementation of an adequate internal control system prevents and controls an entity’s risks and improves its procedures and performance. This study empirically investigates the relationship between the internal control system and firms’ performance, with particular emphasis on the moderation role of an integrated information system. For this purpose, a survey was developed and sent to 215 Saudi firms that had implemented an integrated information system. A hundred and two valid responses were received. Partial least squares structural equation modeling was utilized for the data analysis and hypothesis testing. The findings confirmed that organizational structure, prospectors’ strategy, information system quality, and management support significantly influence the internal control system for the study sample. The finding also supports the role of an information system as a moderator variable in the relationship between internal control and organizational performance. Additionally, the study elucidates the importance of information system maturity for information system quality.

Suggested Citation

  • Hani Alshaiti, 2023. "Influences of Internal Control on Enterprise Performance: Does an Information System Make a Difference?," JRFM, MDPI, vol. 16(12), pages 1-19, December.
    • Handle: RePEc:gam:jjrfmx:v:16:y:2023:i:12:p:518-:d:1301147
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    References listed on IDEAS

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    5. Kim Ittonen, 2010. "Investor reactions to disclosures of material internal control weaknesses," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 25(3), pages 259-268, March.
    6. Granlund, Markus, 2011. "Extending AIS research to management accounting and control issues: A research note," International Journal of Accounting Information Systems, Elsevier, vol. 12(1), pages 3-19.
    7. Baker Akram Falah Jarah & Nidal Zaqeeba & Mefleh Faisal Mefleh Al-Jarrah & Abdalla Mohammad Al Badarin & Zeyad Almatarneh, 2023. "The Mediating Effect of the Internal Control System on the Relationship between the Accounting Information System and Employee Performance in Jordan Islamic Banks," Economies, MDPI, vol. 11(3), pages 1-18, February.
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