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[Review Journal] IT Governance: Objective and Assurance in Internet Banking

“IT Governance: Objective and Assurance in Internet Banking”



Shi-Ming Huang, Wei-Cheng Shen, David C. Yen and Ling-Yi Chou

Advances in Accounting,

Incorporating Advances in International Accounting 27, (2011), 406-414


The aforementioned research on consumer trust specifically identifies the privacy, security, and risk factors of distrust of internet banking as technologically-based concerns (Rajagopalan & Ashutosh, 2005). Furthermore,perceived reputation and quality are key factors to attracting customers to adopt e-commerce technology when customers lack prior experiences (McKnight, Choudhur, & Kacmar, 2002). This study expands upon previous research by integrating the findings of studies related to trust and building upon the constructs of “trusting intention” and“trusting beliefs” proposed by McKnight et al. (2002).

The primary focus of this study is to create internal IT management solutions and address trust issues. Specifically, the purpose of this study is to consider the question of how IT governance affects factors such as trusting beliefs and trusting intention, and how perceived reputation and quality affect trusting beliefs and trusting intention factors. This study employs the COBIT framework to investigate the impact of IT governance on the internal IT process, and also examines IT resource dimensions, including applications, information, infrastructure, and people from the COBIT framework, as useful tools for improving consumer trust.


In summation, there are three steps included in the research methodology,listed below:

  • Step 1: The authors invited eight experts to determine which elements of the initial COBIT 34 control objectives were acceptable, and then designed and developed an IT governance web logo for the experimental internet banking system. The participants’ domain knowledge was derived from internet banking managers familiar with IT governance.
  • Step 2: The authors designed an internet banking web site for the experiment and invited graduate students at a national university in Taiwan to pre-test the developed internet banking web site. Unfortunately, the initial pre-test results yielded a failure. The authors re-examined the experiment’s procedure and discovered the following reasons for failure:
  1. The IT governance study was not adequately explained because of inadequate lecturing experience and preparation.
  2. The experiment time was limited to 60 minutes which was not sufficient to conduct the proposed study successfully.
  3. The respondents could not understand the IT governance control objectives given the short time span allotted to learn them.
  4.  The scenario was insufficiently defined to ensure the participants’ full comprehension of the system, which resulted in a poor internet banking experience.
  5. The paper questionnaire did not generate a sufficient incentive to encourage the participants to log in to the internet banking web site and complete the requested procedures.
  • Step 3: Accordingly, the authors revised the procedures identified as problematic in step 2 and rebuilt the web site using the ASP, HTML, Flash,  IIS, and SQL servers. IT governance experts were selected, invited and employed to develop the model conducted in this study. The authors offered two versions of the web site for the experiment scenario. The only difference between these two versions is that one version contained all relevant IT governance control objective information, while the other did not.


The expert questionnaire of the survey instrument was developed based on the input of the eight participants and the sixteen control objectives that were selected from the COBIT framework (Version 4.0) according to their relevance. All of the control objectives were rated on a three point Likert-type scale.


Path analyses were performed to test these hypotheses using the partial latest square (PLS) method, which is less reliant on measurement scales, sample size, and residual distributions (Chin,1998b) than other methods. The PLS method is suitable for this study because some of the variable constructs are latent variables with measurement items that predict or cause them while others are of the latent variable type for which measurement items are caused or predicted by them (Chin, 1998a; Chin & Todd, 1995).

The significant paths indicate the positive impact of information technology governance on trust intention and trust belief. The path coefficients between information technology governance were 0.177for trust intention and 0.044 for trust beliefs, thus, supporting H1 andH2. The path coefficients between structural assurances were 0.243for trust intention and 0.166 for trust belief. These results support hypotheses H3 and H4. The path coefficients for perceived Internet banking quality were 0.049 for trust intention and 0.230 for trust belief, thus supporting H4 and H5. The path coefficients for perceived Internet banking reputation were 0.242 for trust intention and 0.460for trust belief, thus supporting H6 and H7. The path coefficients for trust beliefs were 0.193 for trust intention, thus supporting H9.More path coefficients are listed in Fig. 4. Overall, the results show that information technology governance control objectives and assurance seal which have information disclosure bases on the COBIT framework will be positively related to the user’s trusting beliefs and trust intention. Furthermore, perceived Internet banking quality and reputation will be positively related to the user’s trusting beliefs and intention when applying the trust model to internet banking.

New Picture (1)


The empirical results of this experiment show that customer familiarity with IT governance and the COBIT assurance seal has impacted customers’ trust in internet banking. Moreover, the results also show that perceived internet banking quality and reputation impact customers’ trust in internet banking.

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