In terms of dynamic and turbulent environment, characterized by enhanced global competition, the uncertainty of demand and company’s survival on the market, it is crucial to precisely define entity’s objectives and how to achieve them. That implies the necessity of proactive approach to risk assessment and risk management in order to protect company’s business, assets, objectives and going concern assumption. To soothe and reduce the risks that threaten the achievement of an entity’s business objectives, entity should design, create and implement effective internal control system. An internal control system comprises the whole network of systems established in an organization to provide reasonable assurance that organizational objectives will be achieved. The internal audit function helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes, as well as providing the solutions for identified weaknesses of internal controls. Leasing companies in Croatia are obligated by law to establish an effective risk management process managed by company itself, and internal audit function, which can be established either as internal department or outsourced. There has been continuous decline in demand for leasing services in Croatian financial market due to decline in overall demand and ongoing recession. These negative trends, as well as the increasing insolvency of debtors are causing leasing companies to be more cautious in providing their services. The aim of this study was to identify and assess internal controls specific to the leasing industry, which should have been implemented by the Company in order to protect itself and its business from previously mentioned, negative trends in the market and in general to ensure and provide effective risk management and risk control system.