| Abstract [eng] |
Relevance of the topic. Effective internal control system creation and maintaining is one of the main firms’ management instrument, which assimilation and use in present economy conditions is providing the advantage against other firms. Market forces to change approach rapidly to internal control: from approach, when internal control is only financial, to control management in process. Internal control is becoming a risk control measures, which lets the firm to obtain its objectives. Successfully performed internal control is revealing firm development prospects, helps to spot the risk, manage that risk, so the maintained risk level would be established and provided reasonable assurance in order to achieve company goals. Many authors described it widely, worth mentioning is Weiss (2013), O’Leary (2006), Jones (2008), Bardhan (2015), Al-Thuneibat (2015) and others. Effective internal control is very important to all companies’ types, also to firms that are established by family members. Family-owned firms are very common all over the world, but very small amount of research has analyzed and evaluated internal control of those firms. The concept of “family-owned firm” is not widely used in Lithuania, however, there are many companies that could be specified as such. The object of the work is internal controls in family-owned firms. The aim of the work is to prove in theory and using survey empirically evaluate family-owned firm internal control. Tasks of the work: 1. To reveal specificity and relevance after analysis of scientific literature of internal control and family-owned firms’ topic. 2. Present and prove research hypotheses of internal control in family-owned firms. 3. According to research methodology, investigate and analyze the results of research. 4. Present recommendations for internal control’s improvement in family-owned firms. The main results: One of the biggest internal control’s problem is unclear duties, roles and responsibilities, according to respondents. Another common problem is a lack of response to internal control’s drawbacks, clarified mistakes and frauds. The results show, that companies’ management does not fully understand the meaning of internal control and the consequences of the absence of internal control. Most of the respondents (120 answers) stated, that they do not face any problem with internal control. This answer was selected by 104 first level, 12 second level and 2 third management level family-owned firms. Analyzing another criterion – a family-owned firm size – this answer was selected by 6 companies, where are working 50 and more employees, 20 companies, where are working 10 to 49 employees and 92 companies, where are no more than 10 employees. If family-owned firms wanted to avoid most common internal control’s problem, they would have to use documents, that regulates the internal work, irrespective of whether the employee is a family member, or not. That would help to protect the confidential information, employees to know and carry out their duties. Neither hypothesis was 100 % proofed because of the research limitations. The main limitation was lack of additional data about family members and their education. |
