The impact of internal control system on corporate governance: A leading educational foundation example

Abstract

This study aimed to examine the impact of the internal control system, which consists of five basic COSO components, on corporate governance principles (justice, transparency, accountability and responsibility) through the example of a leading educational foundation in Türkiye. In the study, it was investigated whether there was a significant relationship between the perceptions of employees regarding the effects of the internal control system components on corporate governance and whether these perceptions differed according to demographic characteristics such as gender, age, education, length of service, position. Methodologically, a descriptive online survey method including a questionnaire was applied to collect data. The survey was sent to 234 participants in different departments and positions working in the foundation, and 197 employees responded. The data were analyzed with SPSS-22. The survey, which was suitable for a 5-point Likert scale, included statements regarding demographic characteristics and COSO’s main internal control components (Control Environment, Risk Assessment, Control Activities, Information-Communication, Monitoring) and corporate governance principles. It was concluded that all COSO components have a significant and positive relationship with corporate governance principles. In addition, a stronger relationship was found between transparency and accountability principles and internal control components compared to others. Furthermore, it was indicated that these perceptions differed according to demographic characteristics. While significant differences were found in perceptions according to demographic characteristics such as gender, age and position, no differences were found according to education and working years criteria. The study is considered to contribute to the literature because it is the first study to examine the impact of the main COSO components on corporate governance and its principles, together with the example of a leading educational foundation. The study is limited by the selected sample educational foundation, the number of respondents, survey questionsanswers, the applied statistical analysis method and tests.