Risk mitigation effects of internal control system in banks: An application in Eastern Black Sea Region

The need for internal control system has increased due to the influential and significant crises that have occurred in the international economic markets, the non-transparent financial statements and the legal regulations that are not at a level to meet the adverse conditions. In this context, the Basel Banking Supervision and Audit Committee has started activities to establish internal control system in the banks in order to identify and prevent possible risks, to check the existing risks as well. The internal control system, which is related to the correct definition and management of risks in terms of its general structure; aims to provide full, reliable and timely financial reporting in compliance with the legal regulations in line with the aims and targets of the institution, to protect the assets of the enterprise, to minimize mistakes and deceit. In this study, which aimed to determine the risk reduction effects of the internal control system, in the 170 results obtained at the significance level of p <0,05; 50 high-level relationships, 97 moderate-intensity relationships, and 23 low-intensity relationships. In the context of expressions that demonstrate the risk-reducing effects of the internal control system, the points to be given importance in the banks are mentioned. Keywords: Internal Control, Risk, Risk Management.