Effects of contingencial aspects on the level of internal control adopted by banking institutions listed in Brazil, Bolsa, Balcão (B3)

The purpose of this article was to verify how contingency aspects affect the level of internal control adopted by 19 banking institutions listed on B3, from 2013 to 2021; which resulted in 171 observations per variable. The data on the level of internal control (dependent variable) were constructed based on the internal mechanisms viewed from the point of view of good Corporate Governance practices of the Brazilian Institute of Corporate Governance (IBGC), being the same obtained in the Reference Forms of the companies, via the B3 website. On the other hand, data on organizational (or contingency) aspects, independent variables, size, age of the organization, diversification of credit products, corporate structure and geographic expansion, were obtained from the Economatica® database, in the registration and Reference Forms and in the Explanatory Notes of banking companies, available on the B3 website. From the multiple regression estimation for panel data, through the Generalized Least Squares (GLS) model, it was observed that age and geographic expansion are not significant to explain the level of internal control, but the size, diversification of credit products and the corporate structure of banking institutions are. However, only the corporate structure is significantly negative. Thus, these results demonstrate that the size and diversification of credit products make banking activities complex and voluminous, justifying the search for more internal controls, but also point out that the different geographical and cultural contexts of banking units can compromise the adoption of managerial controls.