The effect of board efficiency on internal control weakness

With the expansion of joint-stock companies and the increase in the duties and powers of the board of directors of companies, the question arises as to how the managers will pursue the interests of the shareholders and what is the guarantee for securing the key interests of the shareholders and other interested groups, and the inefficiency of the investment of companies with weak internal control compared to Companies that do not have weak internal control are destroyed after disclosure of information, also the separation of ownership from management at the level of companies causes inconsistency between managers and owners. Therefore, the purpose of this research is to investigate the issue that the effectiveness of the board of directors on the weakness of the internal control of the companies listed in the Tehran Stock Exchange between 2015 and 2019 and a sample of 120 companies was analyzed using logistic regression, which the results of the hypotheses test showed that the potential and dynamism of the board of directors (the efficiency of the board of directors) has a significant effect on the weakness of internal control, in other words, the more dynamic and potential the board of directors is, the less the companies suffer from the weakness of internal control.