Corporate Digital Transformation and Internal Control Effectiveness: The Moderating Role of Board IT Expertise
DOI:
https://doi.org/10.63808/iod.v2i3.489Keywords:
Digital transformation, Internal control effectiveness, Board IT expertise, Corporate governanceAbstract
The digital transformation of corporations has changed the control environment by which organizations detect, measure, and deal with any operational and financial risks. This paper analyzes the effects of corporate digital transformation on internal control effectiveness, and the moderating effect of board IT expertise on the relationship using a panel of A-share listed Chinese firms over the period 2013-2022. Internal control effectiveness is defined using DIB internal control index, digital transformation using the frequency of digitalization-related disclosures in annual reports, while board IT expertise using the percentage of IT-experienced directors on the board. According to the results obtained using fixed-effect regression analysis, there is a positive and significant relation between digital transformation and internal control effectiveness, and that relationship is more intensified in the presence of IT knowledge among directors. However, the results remain robust to changes in specification and measurements. Digital transformation is therefore not a technological process but a governance one, where the board IT expertise complements the digital transformation process.
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Copyright (c) 2026 Guangwei Hao
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