Exploring the Interlinkages Between Financial Control Systems and Corporate Accountability: A Theoretical Framework and Empirical Insights
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The present study investigates the interlinkages between financial control systems (FCS) and corporate accountability (CA) through an integrated theoretical–empirical framework. Drawing on agency, stewardship, and institutional theories, the research conceptualizes accountability as a multidimensional construct encompassing transparency, ethical compliance, and stakeholder disclosure. Using partial least squares structural equation modelling (PLS-SEM), the study evaluates the strength and direction of relationships among core FCS dimensions budgetary discipline, audit quality, and risk control systems and accountability outcomes. Results indicate that audit quality exerts the strongest influence on CA, followed by budgetary discipline and risk control systems, collectively explaining a substantial proportion of variance in accountability performance. These findings underscore that internal control structures serve not only as regulatory tools but also as ethical governance mechanisms that reinforce stakeholder confidence and organizational legitimacy. The study provides empirical validation for the proposition that accountability is both a financial and moral outcome of effective control systems. The implications highlight the necessity for firms to align their internal controls with ethical and sustainability objectives to strengthen long-term governance credibility. Future research is encouraged to extend this model across industries and institutional contexts to explore cross-national variations and the integration of environmental, social, and governance (ESG) considerations within accountability frameworks.
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