Internal Control Effectiveness and Business Survival: Evidence from Thai Food Businesses

Abstract

This study aims at investigating the effects of internal control effectiveness on business survival of food businesses in Thailand through the mediators of productivity improvement and value creation. In this study, 155 food businesses in Thailand are the samples of the study. The results show that internal control effectiveness has a significant influence on productivity improvement and business survival. Productivity improvement critically affects value creation and business survival while value creation is an important determinant of business survival. However, internal control effectiveness has no relationship with value creation. Also, productivity improvement explicitly mediates the internal control effectiveness-business survival relationships. In summary, internal control effectiveness can enhance firms' sustainable competitive advantage, superior performance and long-term survival. Firms need to focus on internal control effectiveness through investing their assets and resources and utilizing their abilities, competencies and capabilities in order to continuously develop and improve their appropriate concepts and characteristics in an organization. Better internal control effectiveness definitely leads to more long-term survival. To generalize the research results, future research needs to collect data from other businesses and industries. Increased response rate of the study is important for future research to verify and confirm the research results.

The Effect of Digitalization on Improving the Timeliness of Financial Reporting: Evidence from Egyptian Listed Companies

“…For example, Hasan (2023) found that the more a company moves towards digital transformation the more it leads to adequacy and reliability of accounting information and thus benefits its users. This is consistent with Phornlaphatrachakorn and Kalasindhu (2021) who found that digital accounting has a significant effect on the usefulness of accounting information and the effectiveness of strategic decision. In addition, Johnston and Zhang (2018) found that investing in technology reduces reporting delay by automating the reporting process.…”

“…Based on the results and discussions, it can be concluded that the use of technology improves the timeliness of financial reports, and makes publishing financial reports faster. These results are consistent with Johnston and Zhang (2018), Gulin, Hladika, and Valenta (2019), Aksoy, Yilmaz, Topcu, and Uysal (2021), Phornlaphatrachakorn and Kalasindhu (2021) and Hasan (2023) who found that the quality of accounting information affected by digital transformation. These results are also consistent with Johnston and Zhang (2018) who found that investing in technology reduces reporting delays by automating the reporting and closing process.…”

“…A growing literature provides evidence that new digital solutions such as social networks, websites, artificial intelligence, big data, block chain, and cloud computing, XBRL application etc. will change the way business is conducted, and will enhance the ability of accountants to interpret and report data faster, more efficiently, and effectively (Johnston & Zhang, 2018;Ðurović et al, 2021;Kamel, 2021;Phornlaphatrachakorn, & Kalasindhu, 2021;Agostino et al, 2022;Hasan, 2023). Moreover, new digital solutions will reduce manual data entry, thus improving the speed, quality and accuracy of financial data (Agostino et al, 2022).…”

“…For digital transformation, previous studies found that the quality of accounting information is affected by digital transformation (Johnston & Zhang, 2018;Gulin, Hladika, & Valenta, 2019;Wiralestari, Rita, & Riski 2020;Phornlaphatrachakorn & Kalasindhu, 2021;Hasan, 2023). For example, Hasan (2023) found that the more a company moves towards digital transformation the more it leads to adequacy and reliability of accounting information and thus benefits its users.…”

“…Digital technologies accelerate business activities by the standardizing business processes, and taking fully advantage opportunities and models of digital technologies (Hasan, 2023). Digital technologies provide more personalized ways of customer engagement, higher employee innovation and productivity, and more accurate insights, all of which help a company grow and give it a better business opportunity (Phornlaphatrachakorn, & Kalasindhu, 2021). In addition, digital technologies can empower companies to complete job tasks with greater speed and accurately and interpret and report data and information faster, more efficiently, and effectively.…”