The impact of information technology adoption on internal controls adaptation

The adoption of information technology/information systems (IT/IS) makes it possible to automate the tasks of approving, recording, processing and reporting of transactions. To ensure operational performance, financial information reliability and legal compliance, internal control mechanisms should be gradually constructed into the IT systems, according to the computerisation of the organisation, in order to continue to exercise the controls. However, the adoption of new IT systems often results in internal control deficiencies (ICD) and operational risks due to differences in the perceptual frames of different groups, and hence, a failure in internal controls adaptation. Therefore, this study referred to technological frames of reference (TFR) in order to propose an internal control adaptation model (ICAM) for IT systems adoption. This study explored a case of new IT system adoption in a company and gathered the longitudinal data in order to explain the process of internal control adaptation and the improvements of ICDs, as well as validate the propositions developed by this study. The results can serve as a reference in the construction of internal control mechanisms for new IT systems adoption and as a theoretic foundation of further studies.