Accommodation assessment of internal control systems in management and business performance relationship: An application

The research question at the start point of this study was whether the internal control system of companies has an effect on their company performances. There are two components in the basis of this research question. These are the internal control system and performance indicators. We can define the first component which is the internal control system as a system to serve purposes including the protection of assets of a company, ensuring the correctness and reliability of information and reports on activities, improving effectiveness of activities, determining the suitability of the policies and activities decided by the administration, forming organization structures and controlling all processes, and it consists of all measurements and methods required to achieve these purposes. This system has five components approved by the literature. These components are the control environment, risk assessment, control activities, information and communication, monitoring. The second component of our research question is performance indicators. These are return on assets, asset turnover and gross profit margin. As an answer to our research question in the study scope, surveys were applied to department administrators and personnel who were employed in five-star accommodation enterprises operating in Belek and Kundu tourism regions in Antalya by using face-to-face interview method. Interviews were held by 47 hotels and 202 surveys were collected in the survey study scope. After the sub dimensions of internal control components that were included in the internal control system were determined, three models were formed to assess the effect of each dimension of the formed internal control components on company performance. Despite the independent variables used in the models were kept the same, the dimensions obtained as a result of factor analysis which were control environment 1, control environment 2, risk assessment, control activities, information and communication, monitoring were determined as the representatives of the internal control system. Furthermore, company bed capacity, company activity term and the existence of an internal audit committee as control variables were included in the models. Return on assets, asset turnover and gross profit margin was used as company performance indicators which were model-dependent variables. Considering the results obtained by the study in general, it was determined that the components of company internal control system were effective on company performance. According to this, it was determined that control environment 1, control environment 2, risk assessment, control activities, information and communication, monitoring elements had positive effect on company performance, and the control variables including company bed capacity, company activity term and the existence of an internal audit committee had a positive effect. The quality and running of enterprise internal control system is a guide for the administration. Inadequate and ineffective operations lead to administration errors and thus they reflect on enterprise performance negatively. In this context, running the internal control system and the components of the internal control system accurately and effectively will contribute to company performance positively. Keywords: COSO Model, Internal Control Systems, Company Performance, Accommodation Business, Multiple Regression Analysis.