In condition of global financial crisis companies and investors pay greater and greater attention to the reliability of financial records. An efficient system of internal control (ICS) contributes significantly to this effect. The aim of the research is to consolidate the international experience in the sphere of the development and regulation of the system of internal control, to assess the feasibility of its application to various Latvian enterprises, and to propose a conception and a model of realisation of ICS in medium and small companies. According to the author, there are two main obstacles to the application of the studied theories relevant to the field of internal control in Latvia. The first one is the insufficiency of legislative framework, intended only for listed companies, and the second one is a start-up phase of business development, when the owner and top management are often combined in one and the same person and, therefore, they may believe that all is under their control and there is no need to create a special system of control. The theoretical and methodological foundation of the research was derived from the study of a wide range of activities in the field of corporate management and internal control as well as provisions of regulatory and legislative acts defining the scope of requirements to ICS. In order to achieve the set aim, several objectives were realised: the regulation of ICS in the area of corporate legislation of the USA and the EU was analysed; the conceptual principles and existing models of internal control were summarised; the concept of development of the ICS for medium and small enterprises was formulated, and the necessity to introduce recommendations to the currently effective legislation of Latvia was substantiated.