Internal Control in Auto Parts Manufacturing Under Digital Transformation: A Review

Abstract

With the rapid development of digital transformation in manufacturing, internal control is increasingly supported by information systems, data platforms, and automated business processes. This trend is especially important for auto parts manufacturing firms, because their production processes are complex, their supply chains are highly connected, and their product quality and traceability requirements are strict. This paper reviews existing studies on digital transformation and internal control in the context of auto parts manufacturing. Based on organizational information processing theory, information timeliness theory, and agency theory, it examines how digitalization changes control activities, information and communication, monitoring mechanisms, and risk transmission in the supply chain. The review finds that digital transformation can improve the automation, accuracy, and timeliness of internal control. It can also reduce traditional agency problems by making business activities more transparent and traceable. However, digital internal control may also create new risks, such as information overload, false timeliness, data manipulation, excessive system permissions, and chain reactions caused by supply chain coupling. This paper argues that digital internal control has a double-edged sword effect. Auto parts manufacturing firms should therefore combine technological upgrading with organizational governance, data standardization, permission control, and supply chain risk management.