Information Technology (IT) governance, defined as "the organizational capacity exercised by the Board, executive management and IT management to control the formulation and implementation of IT strategy and in this way ensure the fusion of business and IT" (De Haes and Grembergen 2004, 2005), is an important issue in the information system field. To better understand the role of IT governance in business operations, this dissertation proposes a comprehensive measure of IT governance based on corporate governance literature and IT leadership research. Using this newly proposed measure, we are able to empirically explore its impact on IT material weaknesses (ITMWs), IT capability, and firm performance. The dissertation consists of two studies. Study 1 aims to examine the impacts of firm-level characteristics and IT governance on ITMWs according to the integrated model from general internal control research. Under the Sarbanes-Oxley (SOX) 404, all accelerated filers (companies with market capitalizations of $75 million or more) are mandated to disclose their internal control material weaknesses (MWs). If the MWs are IT related, we refer to them as ITMWs. Study 1 sheds light on whether effective IT governance helps to reduce ITMWs. Study 2 studies the effect of IT governance on IT business value based on the Resource-Based View (RBV) theory. In particular, study 2 investigates how IT governance and IT capability help to achieve firms' competitive advantage measured by both market value measure and sustainable accounting performance. The impact of IT governance on IT capability is also examined. The dissertation is useful from research as well as managerial perspectives. It represents an important contribution to research in both Accounting Information Systems (AIS) and Management Information Systems (MIS).