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ABSTRACT
Leasing is a unique business because its revenue is mostly generated by lending equipments, which range from cars, machineries, to aircrafts. Cars leasing for personal uses is the main business for most leasing companies; small office equipment leasing such as computers, photocopy machines, to large production machineries, aircrafts leasing and investment are businesses aiming corporate clients in this industry. Big leasing companies generally focus their business on corporate finance and machinery leasing, so the problems and risks of lending between the companies and the clients occur naturally. The author hopes the results of “The Discussion on the Internal Control of Leasing Companies – from the Example of Company H”can become a reference for implementing the internal control systems for businesses related to large financial institutions.
This study is conducted for the reasons that big leasing companies lend in the amount so large that these companies should be treated as small banks. Therefore, companies in financial industry that conduct lending businesses should also operate according to the 5P lending rules. The senior managements in these companies need to understand, analyze, and manage the risks related to leasing. Furthermore, the corporations should establish and execute the appropriate controlling policy in order to effectively ensure the acts of managing risks. In terms of the functionality of information and communication systems, its purpose is to let the members of the organization to share, execute, manage, and control the information related to their own acts. The controlling process stated above must be supervised and adjusted if necessary to maintain the effectiveness of the internal control system and formulate an integrated internal control model.
Lastly, the senior level managers have to know where their responsibilities and duties lie, and what the consequences are if the companies’ internal control fails. These people will place importance on the internal control system only if they understand how important it is. The senior managements cannot only ask their subordinates to carry out the acts of control while not knowing what their own responsibilities are and forgetting their roles in the internal control system.
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