Iranian Journal of Accounting, Auditing and Finance in the Islamic Environment

Iranian Journal of Accounting, Auditing and Finance in the Islamic Environment

An Investigation the Impact of Enterprise Risk Management on Financial Performance, Value and Stocks Risk of Companies: Moderated Approach of Corporate Governance

Document Type : Original Article

Authors
Ghodrat Allah Barzegar 1
SABOURA GHOLAMALITABAR FIROUZJAEI 2
1 Assistant Professor in Accounting, Faculty of Economics Sciences and Administrative, University of Mazandaran, Babolsar, Iran.
2 Graduate of the Department of Accounting, Faculty of Economics, Management and Administrative Sciences, University of Semnan, Semnan, Iran.
10.22034/aafie.2022.150574
Abstract
Abstrac
Enterprise risk management is an elixir for organizational bottlenecks because it helps managers to be in the right decision position, in line with the risk to improve the performance and increase the value of the company and its disclosure as a positive signal for investors to evaluate the company's vision and recognizing enterprise risk management is an important step in transforming a business unit.
This study seeks to investigate the effect of enterprise risk management on financial performance, value and stock risk of companies with a corporate governance adjustment approach. In order to achieve this goal, strategic, operational, reporting and compliance risk management criteria were used to identify enterprise risk management. financial information of the statistical population of the research, companies accepted in the Iranian capital market to collect research hypotheses of a sample of 90 manufacturing companies during the period 2011-2019 and structural equation modeling method Based on partial least squares (PLS) was used to analyze the data. The results show that business risk management has a positive and significant effect on financial performance and firm value, but enterprise risk management has no effect the firm stock risk. Furthermore, the findings of the research indicate that corporate governance is not moderating role on the relationship between enterprise risk management and financial performance, stock risk and firm value.
Keywords
Enterprise Risk Management
Corporate Governance
Financial Performance
Firm Value
Firm Stock Risk
1-اکبری، محسن، و قلی زاده، محمدحسن، و فرخنده، مهسا (1396) .«بررسی نقش تعدیل گر درصد مدیران غیرموظف بر رابطه بین فرصت‌های سرمایه‌گذاری و عملکرد مالی». فصلنامه پژوهش حسابداری و حسابرسی، 7 (2)، 103-88.
2-حجازی، رضوان، و مختاری نژاد، حمیدرضا (1396).« رابطه ساختار حاکمیت شرکتی با احتمال گزارشگری متقلبانه». فصلنامه حسابداری ارزشی و رفتاری، 2(3)، 60-33.
3-صیادی، محمد، و دستگیر، محسن، و احمدی، سعید علی  (1398‌).« مطالعه نقش مدیریت ریسک بر رابطه بین توانایی مدیریت و افزایش کارایی سرمایه‌گذاری». راهبرد مدیریت مالی، 7 (24)، 39-1.
4-عسگرنژاد نوری، باقر، و امکانی، پریسا (1395).« تأثیر مدیریت اثربخش ریسک در عملکرد مالی شرکت‌های پذیرفته‌شده در بورس اوراق بهادار تهران: نقش واسطه‌ای سرمایۀ فکری و اهرم مالی». فصلنامه علمی- پژوهشی مدیریت دارایی و تأمین مالی. 5(2).
5-موسوی شیری، محمود، و سلیمانی، حمید، و مومنی، یوسف، و سلیمانی، حجت (1392).« رابطه بین کیفیت افشای اطلاعات حسابداری و نوسان پذیری بازده سهام». فصلنامه پژوهش‌های تجربی حسابداری، 5(4)، 144-131.
 
6-Altanashat, M. Dubai, M.Alhety, S. (2019). The impact of enterprise risk management on institutional performance in Jordanian public shareholding companies. Journal of Business and Retail Management Research, Vol. 13 Issue 3.
7-Abdullah, B. S. H. M. Janor, H. Abdul Hamid, M. Yatim, P. (2017).The effect of enterprise risk management on firm value: Evidence from Malaysian technology firms. Jurnal Pengurusan.49, 3-11.
8-Banker, R. Niren, S. (2005). Finding the best marketing mix, Journal of Business Strategy, Vol. 26, Issue 6, 10 – 11.
9-Barton, T. L. Shenkir, W. G. &. Walker, P. L. (2002).Making enterprise risk management payoff: How leading companies implement risk management. Financial Times/Prentice Hall, Upper Saddle River, NJ.07458.
10-COSO (2004) COSO Enterprise risk management-integrated framework: Application techniques, committee of sponsoring organizations of the treadway commission. https://www.coso.org.
11-Cohen, J. (1988). Statistical power analysis for the behavioral sciences. United States of America, DC: Lawrence Erlbaum Associates.
12-Donaldson, L. (1990). The ethereal hand: Organizational economics and management theory. Academy of management Review, 15(3), 369-381.
13-Dickhaut, J.W. and McCabe, K.A. (1997). The behavioral foundations of stewardship accounting and a proposed program of research: what is accountability? Behavioral Research in Accounting, 9. pp. 60-87.
14-Gordon, L. A. Loeb, M. P. & Tseng, C. Y. (2009). Enterprise risk management and firm Performance: A contingency perspective. Journal of Accounting and Public Policy, 28(4), 301-327.
15-Gaver, K.M.O’Keefe, T.B. King R.D. (1994). Audit fees, industry specialization and compliance with GAAs reporting standards. Auditing, 63-22.
16-Gonzalez. O. L. Santomil, D. P. Herrera, T. A. (2020).The effect of Enterprise Risk Management on the risk and the performance of Spanish listed companies. European Research on Management and Business Economics.26, 111–120.
17-Handayani.B. D. Rohman. A. Chariri. A. Pamungkas. I. D. (2020) Corporate Financial Performance on Corporate Governance Mechanism and Corporate Value: Evidence from Indonesia. Montenegrin Journal of Economics. Vol. 16, No. 3.
18-Institute of Risk Management (IRM). (2018b). a Risk Practitioners Guide to ISO 31000: 2018.Institute of Risk Management, London. Retrieved from.
19-Idris, A. & Norlida Abdul, M. (2016). Moderating effects of board equity ownership on the relationship between enterprise risk management, regulatory compliance and firm performance: Evidence from Nigeria. International Journal of Economics, Management and Accounting, 24(2), 1–46.
20-Johnson, V.E. Khurana, I.K. Reynolds, J.K. (2002) Audit-firm tenure and the quality of financial reports. Contemporary Accounting Research, 423-449.
21-Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. The American economic review, 323-329.
22-Jensen, M. & Meckling, W. (1976) Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3, 305-360.
23-Kiymaz, H. (2006). The impact of announced motives, financial distress, and industry affiliation on shareholders’ wealth: evidence from large sell-offs. Quarterly Journal of Business and Economics, 45: 69–89.
24-Klimczak, K. M. (2007). Risk Management Theory: A comprehensive empirical assessment. Leon Kozminski Academy of Entrepreneurship and Management in Warsaw, Poland Munich Personal RePEc Archive) MPRA (Paper No. 4241, posted 24.
25-Lechner, P. & Gatzert, N. (2018). Determinants and value of enterprise risk management: empirical evidence from Germany. The European Journal of Finance, 24(10), 867–887.
26-Lin, Y. Wen, M. M. & Yu, J. (2012), “Enterprise risk management: strategic antecedents, risk integration, and performance”, North American Actuarial Journal, Vol. 16 No. 1, pp. 1-28.
27-Mohd Ali, M. Ghani, E. Ab Hamid, N. (2019). Examining the relationship between enterprise risk management and firm performance in Malaysia. International Journal of Financial Research. Vol. 10, No. 3.
28-Maruhun, E. N. S. Abdullah, W. R. W. Atan, R. & Yusuf, S. N. S. (2018). The Effects of corporate governance on enterprise risk management: Evidence from Malaysian shariah-compliant firms. International Journal of Academic Research in Business and Social Sciences, 8(1), 865–877.
29-Mayers, D. & Smith, C. W. (1987). Corporate insurance and the underinvestment problem. Journal of Risk and Insurance, 54(1), 45-54.
 30-Ming er, CH. Wen, S. L. Yew, T. S. Zen, S. T. Sim, Y. Y. (2019). Enterprise risk management (ERM): An empirical analysis of factor associated with PLC firm value in Malaysia. Degree of bachelor of finance, University Tunku Abdul Rahman.
31-Nurhayati. (2019). Effects of governance mediation on the relationship between enterprise risk management and financial performance. Journal of Auditing, Finance, and Forensic Accounting (JAFFA). Vol. 7, No. 1, Page. 1 – 43.
32-Noor, P. I. Astika, B. I. (2016). Perbedaan kinerja dan nilai perusahaan sebelum dan setelah pergantian chief executive officer. E-Journal Akuntansi Universitas Udayana, 17(2), 1057-1082.
33-Ondigo, H. (2018). Risk management, firm characteristics, corporate governanceand bank performance: A critical literature review. African Journal of Business and Management, Volume 4, Issue 3, 98- 120.
34-Olayinka, E.A. Uwuigbe, U. Sylvester, E. Uwuigbe,R. O. & Amiolemen,O. O. (2019).Does enterprise risk management impact accounting quality? Evidence from the Nigerian financial institutions.Investment Management and Financial Innovations. Volume 16, Issue 4.
35-Perera1, A. A. S. Rahmat A. K. Khatibi, A. Azam. S. M. F. (2020). Review of literature: Implementation of enterprise risk management into higher education. International Journal of Education and Research. Vol. 8 No. 10.
36-Rasid, S. Z. A. Isa, C. R. &.Ismail, W. K. (2014). Management accounting systems, enterprise risk management and organizational performance in financial institutions. Asian Review of Accounting. 22: 128–44.
37-Smith, C. W. & Stulz, R. (1985). The determinants of firms' hedging policies. Journal of Financial and Quantitative Analysis, 20(14), 391–405.
38-Sayyadi, M. Dastgir, M. & Ahmadi, A. (2019). The study of enterprise risk management (ERM) effect on the relationship between managerial ability and investment efficiency increase. Journal of Financial Management Strategy. Vol. 7, No. 24. 1-39. (In Persian).
39-Sithipolvanichgul, J. (2016). Enterprise risk management and firm performance: Developing risk management measurement in accounting practice. (Doctoral Dissertation), University of Edinburgh, London.
40-Shad, M. K. Lai, F. (2018) Enterprise risk management implementation and firm performance, International Journal of Business and Management; Vol. 14, No. 9.
41-Walsh, J. P. & Seward, J. K. (1990). On the efficiency of internal and external corporate control mechanisms. Academy of Management Review, 15(3), 421–458.
42-Wang. J. Y. Wang. J. L. Liao. H. Y. (2019).Does corporate governance enhance firm performance and reduce firm risk? Evidence from Taiwanese listed Ccompanies. Journal of Economics and Management, Vol. 15, No.1.
43-Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171–180.
44-Zungu, S. Sibanda, M. Rajaram, R. (2018). The effect of the enterprise risk management quality on firm risks: A case of the South African mining sector. African Journal of Business and Economic Research. Vol. 13, Issue 1, pp. 115-133.
Iranian Journal of Accounting, Auditing and Finance in the Islamic Environment
Volume 1, Issue 1 - Serial Number 1
Spring 2024
Pages 123-156

  • Receive Date 24 April 2022
  • Revise Date 26 May 2022
  • Accept Date 29 May 2022
  • Publish Date 20 February 2022