THE ROLE OF DIGITALIZATION IN IMPROVING THE EFFECTIVENESS OF INTERNAL CONTROL IN GOVERNMENT INSTITUTIONS: A LITERATURE REVIEW

Abstract

Advances in information technology have driven a digital transformation in financial management and government governance. This study aims to analyze the role of digitalization in enhancing the effectiveness of internal controls within government agencies, utilizing a literature review approach. The analysis examines various scholarly articles and academic documents published between 2015 and 2025. The findings indicate that the implementation of integrated information systems—such as e-government, e-budgeting, Financial Management Information Systems (FMIS), the Agency-Level Financial Application System (SAKTI), and Regional Government Information Systems (SIPD)—improves transparency, accountability, the quality of financial reporting, and the effectiveness of monitoring, while also supporting more informed decision-making. Furthermore, digitalization contributes to mitigating the risk of fraud through data integration and process automation. However, its success is contingent upon human resource competence, information technology governance, cybersecurity, and the organization's internal control culture.