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Journals / Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty / 2025 / Volume: 12 Issue: 4

The Connection Between Internal Control System, Financial Distress, Risk, and Financial Performance: A Study on BIST Manufacturing Firms

Merve Aksay(bağımsız araştırmacı)0000-0003-2016-5729
Ömer Tekşen(MEHMET AKIF ERSOY UNIVERSITY)0000-0002-3663-1619
Pages
—
Publication Date
2025-12-23
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

There is no relationship between the effectiveness of the internal control system of companies and financial failure and financial performance.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:The need for internal control systems has been highlighted by accounting scandals and financial reporting fraud, which started in the US and eventually expanded throughout the world.
📊
Key Findings & Data:The objective of the study is to examine and analyze the connection between the internal control system, financial failure risk, and financial performance.
💡
Conclusion & Impact:There is no relationship between the effectiveness of the internal control system of companies and financial failure and financial performance.
🔬Design:Modeling & Simulation
📍Scope:2000–2020 Verileri
⚙️Variables:Internal Control System · Financial Performance · Financial Distress

Abstract

The need for internal control systems has been highlighted by accounting scandals and financial reporting fraud, which started in the US and eventually expanded throughout the world. Internal control systems can reduce mistakes and fraud while increasing an organization's profitability if they are implemented properly. The objective of the study is to examine and analyze the connection between the internal control system, financial failure risk, and financial performance. The present study is designed to add to the literature by investigating the effects of financial distress on the performance of internal control systems. The study selected manufacturing companies listed on the Istanbul Stock Exchange for the period 2000–2020. Correlation analysis was used to test the study’s hypotheses and analyze the relationships, while the Altman Z-Score model was applied to assess the financial distress risks of the firms. As a result, it was observed that the relationship between the three concepts differed. There is no relationship between the effectiveness of the internal control system of companies and financial failure and financial performance.

🔖

Cite This Article

Aksay, M., Tekşen, Ö. (2025). The Connection Between Internal Control System, Financial Distress, Risk, and Financial Performance: A Study on BIST Manufacturing Firms. Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty, Volume: 12 Issue: 4. https://doi.org/10.30798/makuiibf.1735092

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