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This study examines how business performance affects small and micro enterprises’ decision on establishing  an internal control committee. By observing a sample of 186 small and micro firms in Turkey, we test  the claim that small and micro enterprises’ financial problems obstruct establishing an internal control  committee. We measure business performance by financial and non-financial indicators obtained from  sample firms’ accounting reports and information system. Then, the effect of business performance on  establishing an internal control committee is studied by a binary logistic regression analysis. As a result of  the analysis it is explored that there was a statistically significant positive effect of business performance  on “establishing an internal control committee” decision and the claim that financial problems obstruct  establishing an internal control committee is verified.

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EXPLORING THE EFFECT OF BUSINESS PERFORMANCE ON SMALL AND MICRO ENTERPRISES TO ESTABLISH AN INTERNAL CONTROL COMMITTEE: A BINARY LOGISTIC REGRESSION MODEL