Determinants of Effective Information Technology Governance

Abstract

This study examines relations between the overall level of effective information technology (IT) governance and five commonly advocated individual mechanisms of IT governance. It extends the examination of individual IT governance mechanisms to include a wider number of mechanisms, justifies the mechanisms investigated via agency theory, seeks to relate these mechanisms specifically to a perceived overall level of effective IT governance in organizations, and attempts to mitigate the problems of limited generalizability and selection bias by employing a survey and generalized sampling research methodology. The results from a survey of professional auditors reveal significant positive relations between the overall level of effective IT governance and three IT governance mechanisms: IT steering committees, senior management involvement in IT, and corporate performance measurement systems. Ex‐post sensitivity analyses reveal that the primary findings are qualitatively similar across internal auditors and external auditors, as well as information systems auditors (IS) and non‐IS auditors.

Information Technology Governance on Audit Technology Performance among Malaysian Public Sector Auditors

“…IT steering committee provides strategic direction for IT related audit engagement that is in line with the strategic directions of the organisation (Ferguson et al 2013) …”

“…These measurement items have been validated on its reliability and validity in previous literature, specifically in governance and IS literature (Ifinedo 2011;Li et al 2015). The measurement items used for this construct were modified from IS literature (Li et al 2015;Kim et al 2009), governance literature (Ali and Green 2012;Ferguson et al 2013) and auditing literature (Ahmi and Kent 2013) to fit the purpose of the research context and the respective questionnaires as shown in Table 1. …”

“…An effective ITG comprises of IT structures, management participation, well-disseminated IT strategies and IT policies as well as clearly defined performance indicators (Nfuka and Rusu 2010). Furthermore, top management participation in IT decision making, the establishment of IT steering committees in handling IT related issues to ensure they are in line with organisational goals, and the use of key performance indicators related to IT have significantly measured the effectiveness of IT governance (Ferguson et al 2013). IT strategies and IT plans are able to ensure that IT investments have been evaluated for relevant risk and assist the business expectation (Wilkin and Chenhall 2010;Ali and Green 2012).…”

“…Senior management support is important in creating a supportive climate and allocating sufficient resources for the successful utilisation of technologies (Wang et al 2010;Low et al 2011) and being significant drivers in making decisions on technology adoption in audit organisations (Mahzan and Lymer 2014;Ahmi and Kent 2013). Further, reviews indicated that IT strategy as the technology-related strategic policy is providing guidance and direction on IT-related activities (Nfuka and Rusu 2010) and IT Committee as a supporting mechanism for managing IS related activities (Ferguson et al 2013;Ali and Green 2012) are important mechanisms for effective governance. IT support services also play an important role in assuring the usage of audit technology among the auditors (Vasarhelyi and Romero 2014).…”

“…IT steering committee provides a mechanism for coordinating IT related audit engagement (Ferguson et al 2013) G_Com1 IT steering committee provides leadership in managing IT related activities (Ferguson et al 2013) G2-IT Strategy IT Strategy…”