Selected controls in two large Maltese companies : a comparative analysis

Abstract

Purpose: The objective of this dissertation is to evaluate the Budgetary Control and the Internal Audit Function found within a public listed company and a non-listed company. The aim is to analyse whether any differences in these controls exist and the reasons thereof. In addition, this study aims to identify and analyse any recommendations to improve internal controls. Design: In order to reach the research objectives, a qualitative approach was adopted by means of two semi-structured interviews conducted with the Finance director and Internal Audit director representing each company. These were selected in order to obtain a better understanding of the controls in place and be able to achieve a better insight into differences in controls. Findings: Results from the semi-structured interviews indicate that when comparing the responses obtained from both companies, similarities in control procedures were found. The minor differences found on the other hand show a positive perspective of non-listed companies towards internal controls and portray that although the latter may be perceived to have less stringent rules, high level of controls is still kept throughout the organisation. Conclusion: Despite the perception that large listed companies may have stronger control procedures due to their listing on the Malta Stock Exchange and their adherence to the Listing Rules, the study portrayed that both companies under review perceive the same obligations towards their stakeholders and thus give internal controls their due importance regardless of how they are regulated locally. Value: Given that this study has never been studied on a local level, and the increasing importance of internal controls in recent years, this research sought to analyse whether differences exist between listed and non-listed companies to overcome the perception that non-listed companies may be less stringent on control measures than listed companies.