A Review on the Need for Internal Audit and Family Constitution in Family Companies

Abstract

Companies in which management functions are consolidated in a family or a group are called the family business. Family businesses often start to operate as SMEs, become larger companies over time, an deven go public to become a part of the group of companies. However, the family mambers presence in the steering community and the harmful effects of family conflicts on the management process disclose the need for a family constitution. Furthermore, it is known that the lack of internal audits of businesses harms the timely and correct receipt of the data and even the correct processing. This study aims to determine the need for a family constitution in family businesses and to disclose the impact of internal audit activities on family businesses.