The quality of the internal control system and the success of decision-making: The role of financial information quality

Abstract

This study aims to develop and evaluate a contingency model for decision-making success by assessing its dependence on the quality of the internal control system and the quality of financial information. The authors conducted a study based on a sample of 231 employees from financial institutions affiliated with the Libyan Ministry of Finance. Structural equation modeling (SEM) was used to analyze the causal relationships between the constructs. The results revealed that the quality of the internal control system directly contributes to the success of the decision-making process. Moreover, the findings indicated that the quality of the internal control system has a significant direct impact on the quality of financial information and an indirect impact on decision-making success. This research fills a literature gap by identifying independent variables that determine decision-making success from an institutional perspective. The study is highly relevant for developing literature as it evaluates an original model and identifies factors contributing to the success of financial institutions.