Digital Transformation,Effectiveness Of Internal Control And Enterprise Performance

In recent years,China’s digital technology has flourished,creating a new form of economic development called the digital economy.A large number of information technology enterprises have emerged in the fields of basic hardware,cloud computing and information technology applications,which have strongly contributed to the digital transformation of China’s real economy and promoted the deep integration of the digital and real economies.At the same time,the digital economy also poses higher-level requirements and challenges to enterprises participating in the market economy competition in terms of management decision-making paradigm and value creation process.In the report of the 20th National Congress of CPC,General Secretary Xi Jinping emphasized that "the focus of development should be insisted on the real economy".The real economy is the foundation of a country’s foundation and the source of its wealth.In the new era of digital economy,great importance should be attached to the development of digital economy and the deep transformation of traditional industries,so as to improve the international competitiveness of the real economy.Therefore,in the context of digital economy,it is of urgent practical significance to study in depth how enterprises can deeply integrate digital transformation and internal control system and build a new digital governance system,so as to provide an important topic of enterprise performance improvement.This paper takes A-share listed companies in Shanghai and Shenzhen from2011-2021 as research samples,subdivides digital transformation according to different technical characteristics on the basis of total digital transformation characteristics,subdivides internal control effectiveness according to the principle of five elements of internal control on the basis of total internal control effectiveness index,and empirically tests the relationship between digital transformation with different technical characteristics and multi-dimensional internal control The relationship between digital transformation with different technological characteristics and multidimensional internal control effectiveness and corporate performance.This paper concludes that(1)when companies undergo digital transformation,corporate performance is significantly improved;(2)when digital transformation is subdivided according to different technological characteristics,digital transformation technologies of artificial intelligence,cloud computing and practical application level types can all have a positive impact on corporate performance;(3)when companies undergo digital transformation,they can effectively improve the effectiveness of internal control;(4)After breaking down internal control effectiveness according to the five elements of internal control principles,digital transformation can optimize the internal control environment,enhance the effectiveness of risk assessment,improve the accuracy of control activities,and facilitate information and communication within and outside the enterprise;(5)in the mechanism study,digital transformation improves enterprise performance by increasing the effectiveness of internal control in the enterprise.After various robustness tests,the above conclusions still hold,ensuring that the results of this paper are robust and reliable.In further research,in the grouping tests based on micro enterprises,it is found that the positive impact of digital transformation on corporate performance is greater in state-owned enterprises and manufacturing enterprises,the positive impact of digital transformation on the effectiveness of corporate internal control is greater,and digital transformation is better able to improve corporate performance by improving the effectiveness of internal control and thus better corporate performance.In contrast,in a group test based on the macro environment,the study finds that the contribution of digital transformation to firm performance is greater among firms with high levels of regional economic development and low levels of regional digitalization,and digital transformation is better able to improve firm performance by improving internal control effectiveness and thus better able to improve firm performance.The main contributions of this paper are: on the issue of how to measure the degree of digital transformation and internal control effectiveness of enterprises,this paper constructs more detailed,comprehensive and objective evaluation indexes based on existing studies;enriches the theoretical research on improving the effectiveness of internal control and performance growth of enterprises in the macro context of digital economy,and summarizes new theoretical evidence;provides new theoretical evidence on how enterprises can grasp the development opportunities of the digital economy era and integrate digital transformation and internal control effectiveness.It provides a worthy basis for enterprises to grasp the development opportunities in the digital economy era,interpenetrate both digital transformation and internal control system,build a digital governance system with business activities as the core,and form a core competitive ability based on digital governance system,so as to realize the growth of enterprise performance,which has certain policy inspirational significance and provides certain empirical evidence for enterprises that are currently undergoing digital transformation.