Abstract:

The development of economic activities has led to the emergence of new businesses and practices that provide resources for the financial system. Finance companies are non-banking institutions that provide funds to the financial system. Commercial finance companies have in recent years become a favorite option for entrepreneurs seeking small business loans. Commercial financing institutions generally charge higher interest rates than banks, but they are also more likely to approve a loan request. Most loans obtained through finance companies are secured and the assets used as collateral can be seized if the entrepreneur defaults on the loan. Consumer finance companies make small loans against personal assets and provide an option for individuals with poor credit ratings. Commercial finance companies provide small businesses with loans for inventory and equipment purchases and are a good resource of capital for manufacturing enterprises. Finance companies contribute to the growth of the economy by means of production and expenditures.  Legal arrangements related to these organizations are stated at the Law No. 6361 on Financial Leasing, Factoring and Finance Companies. Article 14 of the Financial Leasing, Factoring and Finance Companies Act stipulates that an internal control structure should be established in order for the activities of the financial institutions to be carried out effectively and efficiently. Establishment of effective internal control structure is important for financing companies. Organizations working in the fields of accounting and auditing come together to work on the prevention of fraudulent transactions in the world. The most important of which is the work known as the "Internal Control, Integrated Framework" prepared by the Treadway Commission. This work has been accepted in the context of an internal control regulation that is being implemented all over the world Internal control is a process that is influenced by the institution's board of directors, senior management and other personnel and is designed to provide reasonable assurance that the following objectives have been met. - Efficiency and efficiency of activities, - The reliability of financial reports, - Compliance with laws and regulations. Internal control components in the framework of the COSO model; control environment, risk assessment, control activities, information communication and monitoring.   Internal audit is an independent and impartial assurance and consulting activity aimed at improving the activities of an enterprise and adding value to them. Internal audit is an activity related to risk management, internal control and corporate governance processes of enterprises. Establishment and implementation of the internal control structure is the responsibility of the senior management. Internal audit is the task of  assessing the effectiveness and efficiency of the internal control structure. Financing companies are institutions that provide long-term payment to buyers purchasing long-lived products and act as brokers for collecting the cost of the seller's business. The application of the financing company can be a commercial property, vehicle, housing, education, health, consumer durables or stock financing. The distinctive feature that distinguishes financing companies from banks and other financial institutions is the practice of concurrent service with sales points. The financing company may be exposed to many risks within its activities. An effective internal control structure should be established to identify, assess and manage these risks. The main objective of establishing an effective internal control structure is to provide a healthy, transparent, efficient, functioning. The internal control structure consists of the following elements (Internal Control-Integrated Framework, 2013). 1. Control Environment 2. Risk Assessment 3.Control Activities 4. Information and Communication 5. Monitoring For a sustainable and stable economic system, non-bank financial institutions that provide resources to the system must be managed effectively and efficiently. In particular, for the past two decades, the financial system has been experiencing a technology-driven period that is constantly being renewed. For future funding methods, there is a need for new scientific studies on financial institutions' branch structures and payment systems. Financing companies need to reconfigure their internal control structures and internal audit processes in parallel with developments in the world. By using information technology, a large amount of data can be evaluated in a very short time. As a result of this application which increases the efficiency in inspection, the control risk can be reduced to the minimum level. Use of technology provides effectiveness and productivity, providing rapid feedback, and providing benefits for the complete and rapid preparation of reports. However, company secrets, cyber security and data sharing issues are likely to occur in the coming days. It is also important for financing companies to undertake studies on the prevention of these problems. In the study, an effective internal control structure method applicable to finance companies was proposed. Establishment of a healthy internal control structure is also important in terms of the sound operation of the general economic structure as well as the enterprises providing financial resources.

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