The principles underlying components of internal control are just as applicable for smaller entities as for larger ones. However, implementation approaches may vary for smaller entities, regardless of whether the entity is publicly traded, privately held, governmental, or not-for-profit. For example, all public companies have boards of directors, or other similar governing bodies, with oversight responsibilities related to reporting. A smaller entity may have a less complex management operating model and entity structure, and more frequent communication with directors, enabling a different approach to board oversight. Similarly, while many public companies are often required to have a whistle-blower program, there may be a difference in the reporting procedures between other types of smaller and larger entities. In a large entity, for example, the volume of reported events may require initial reporting to an identified internal staff function, but a smaller entity may allow direct reporting to the audit committee chair.

Smaller entities typically have unique advantages, which can contribute to effective internal control. These may include a wider span of control by senior management and greater direct interaction with personnel. For instance, smaller companies may find informal staff meetings highly effective for communicating information relevant to operating performance, whereas larger companies may need more formal mechanisms such as written reports, intranet portals, periodic formal meetings, or conference calls to communicate similar matters.

Conversely, larger entities may enjoy certain economies of scale, which often affect support functions. For example, establishing an internal audit function within a smaller, domestic entity likely would require a larger percentage of the entity's economic resources than would be the case for a larger, multinational entity. A smaller entity may not have an internal audit function or might rely on co-sourcing or outsourcing to provide needed skills, where the larger entity's function might have a significantly broader range of experienced in-house personnel. But in all likelihood the relative cost for the smaller entity would be higher than for the larger one.