Factors of Affecting Internal Control Benefits under ERP System An Empirical Study in Taiwan

Abstract

Implementation of an ERP system has become an inevitable trend in modern enterprises. The smooth performance of daily operations and successful reduction of operational risks for an enterprise depend on the implementation of a sound internal control mechanism. Referencing literature and recruiting internal auditors of Taiwan Stock Exchange (TWSE)/Gre Tai Securities Market (GTSM)-listed companies and emerging stock companies, this study investigates the factors that influence the internal control benefits (based on COSO) of an enterprise in an ERP system environment. The results indicate that (1) critical factors that influence the internal control benefits of an enterprise include various ERP quality variables, such as system and information quality, service quality, and internal control quality. Good communication quality can enhance the internal control benefits. (2) The extent of implementation and the internal control benefits of an enterprise are positively correlated. The implementationof internal controls with an ERP equipped with an internal control mechanism improves the internal control benefits of an enterprise.