Digital transformation and internal control effectiveness: The moderating role of firm size in Vietnamese enterprises
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Author(s)Dao Manh HuyLink to ORCID Index: https://orcid.org/0000-0003-2622-649X
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Nguyen Thanh TungLink to ORCID Index: https://orcid.org/0009-0000-9651-4441
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DOIhttp://dx.doi.org/10.21511/afc.07(2).2026.01
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Article InfoVolume 7 2026, Issue #2, pp. 1-14
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3 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Type of the article: Research Article
In the dynamic landscape of emerging economies like Vietnam, digital transformation is increasingly recognized as a strategic imperative for enhancing corporate governance and transparency. This study aims to evaluate the direct impact of technological integration on internal control effectiveness and investigate the moderating mechanism of firm size in this relationship. To ensure representativeness across small, medium, and large organizational scales, a stratified random sampling technique was employed. The quantitative data were collected over a six-month period from October 2024 to March 2025. A structured questionnaire, validated by experts and utilizing a 5-point Likert scale, was distributed via email to key personnel in Vietnamese enterprises, resulting in 452 valid responses. The partial least squares structural equation modeling method was applied to analyze the data, specifically chosen for its suitability with non-normal distributions. The results demonstrate that digital transformation exerts a substantial positive influence on internal control effectiveness (β = 0.424, p-value < 0.001), confirming that digitization significantly bolsters risk management capabilities. Crucially, the analysis identifies a statistically significant negative moderating effect of firm size (β = –0.190, p-value < 0.001). These findings indicate that the positive impact of digitalization on internal control diminishes as organizational scale increases. The study concludes that while large corporations face structural inertia, small and medium-sized enterprises leverage their agility to achieve superior control outcomes, necessitating tailored strategies for different enterprise scales.
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JEL Classification (Paper profile tab)O33, M15, M41, L25
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References33
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Tables12
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Figures3
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- Figure 1. Proposed model
- Figure 2. Results of the PLS-SEM structural equation model analysis
- Figure 3. Simple slope analysis of the moderating effect of FS
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- Table 1. Description of research sample characteristics
- Table 2. Summary of variance inflation factor (VIF) for component indicators
- Table 3. Evaluating the measurement model
- Table 4. HTMT confidence intervals based on bootstrapping
- Table 5. Structural model results
- Table 6. Summary of hypothesis testing
- Table 7. Interaction analysis (H2)
- Table 8. Predictive power assessment for ICE
- Table A1. Summary of measurement design
- Table B1. General information
- Table B2. Digital transformation (DT)
- Table B3. Internal control effectiveness (ICE)
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