The Importance of Internal Control on Accounting Information System’s Quality: Survey on Banking Sector

Lingga, Ita Salsalina (2021) The Importance of Internal Control on Accounting Information System’s Quality: Survey on Banking Sector. In: 1st International Conference on Emerging Issues in Humanity Studies and Social Sciences, 1-2 July 2021, Bandung.

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Abstract

In today’s world that relies more on information technology, all business organizations need accounting information systems (AIS) to be able to compete and survive. The phenomenon of unqualified AIS occurs in various organizations including banks. A qualified AIS will have an impact on accounting information’s quality. Thus, internal control must be developed to ensure proper data entry process, processing techniques, storage methods and information generated. It is needed to ensure that AIS operates as it should so that the risk of deviation from predetermined objectives can be avoided. This study aims to analyze the effect of internal control effectiveness towards AIS’s quality. The research survey was conducted on regional development banks, located in 27 provincial capitals throughout Indonesia. Data were collected through a questionnaire. Partial Least Square SEM method was used in data processing and analysis. The results proves that there is an effect of internal control effectiveness on AIS’s quality. Internal control that was conducted showed a gap which means that they have not yet been implemented effectively in order to enhance AIS’s quality. Therefore, internal control effectiveness is very important to enhance AIS’s quality which will have an impact on accounting information’s quality.

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