The use of hard- and soft controls whitin Dutch Small and Medium Sized Enitities

This study investigates how hard and soft controls are used within small and medium sized entities. Based on the existing literature on control systems and prior research on the use of hard and soft controls, different types of hard and soft controls are listed. Hypotheses are developed with regard to the coherence between the complexity of an entity, in terms of ex-ante and ex-post uncertainty, and de use of hard and soft controls, the coherence between the size of an entity and the use of hard and soft controls, the coherence between hard controls and soft controls, the coherence between different types of hard controls and the coherence between different types of soft controls. Hypothesis are tested, based on data obtained from the audit files and involved auditors regarding the annual audits of 25 small and medium entities. Results show that there are negative significant correlations between the ex-ante and ex-post uncertainty of a system to control and the use of hard controls. A positive significant correlation is found between soft controls and the ex-ante uncertainty of a system to control. No significant correlation is found between the ex-post uncertainty and the use of soft controls and company size and the use of hard and soft controls. A positive significant correlation is found between the use of different types of hard controls and between the use of different types of soft controls. The presence of the different types of hard controls does not differ, while the presence of the different types of soft controls does.