Abstract

The development and application of information technology makes it possible to automate the tasks of approving, recording, processing and reporting of transactions. To ensure operational performance, financial reporting reliability and legal compliance, internal control mechanisms should be gradually constructed into the information systems, according to the computerization of the enterprise, in order to continue to exercise the internal controls. Therefore, the main purpose of this study was to develop a model, in which internal controls adaptability affects internal controls efficacy and operating performance, and internal controls efficacy influences operating performance. Research hypotheses derived from the model were tested using regression analysis on the questionnaire data and financial data from Taiwanese listed companies. The results showed that not only internal controls adaptability had an impact on internal controls efficacy and operating performance, but also internal controls efficacy had a partial influence on operating performance. The research findings could be a theoretical foundation for further study.

Key words: Information systems, computerized internal controls, internal controls adaptability, internal controls efficacy, operating performance.