The Effect of Organizational Culture on Internal Control Systems and Financial Accountability Mechanisms

Posted: May 27, 2024

• Mia Roberts
• Mia Smith
• Mia Taylor

Abstract

This research investigates the complex interplay between organizational culture and the effectiveness of internal control systems and financial accountability mechanisms. While traditional accounting literature has extensively examined technical aspects of internal controls, this study pioneers a novel approach by examining how cultural dimensions—specifically psychological safety, ethical climate, and organizational learning orientation—directly influence control system effectiveness. Through a mixed-methods approach combining quantitative survey data from 347 organizations across multiple industries with in-depth qualitative case studies, we develop a Cultural-Control Alignment Framework that demonstrates how cultural attributes either reinforce or undermine formal control mechanisms.