Management Accounting And Risk Management Practices In Financial Institutions

2012 ◽  
Author(s):  
Siti Zaleha Abdul Rasid ◽  
Abdul Rahim Abdul Rahman
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Management Practices ◽  
Management Accounting ◽  
Enterprise Risk Management ◽  
Chief Financial Officers ◽  
Operational Risks ◽  
Enterprise Risk ◽  
Budgetary Control ◽  
Contemporary Management

Tujuan kertas kerja ini adalah untuk melaporkan hasil kajian terhadap amalan perakaunan pengurusan dan amalan pengurusan risiko di institusi kewangan. Data dikutip menggunakan borang soal selidik yang dihantar kepada 106 institusi kewangan yang tersenarai di dalam website Bank Negara Malaysia, di mana Ketua Pegawai Kewangan atau pegawai terkanan di jabatan kewangan institusi–institusi tersebut dilantik sebagai responden kajian. Analisis amalan perakaunan pengurusan berdasarkan kerangka IFAC (1998) menunjukkan bahawa amalan yang lazim diguna pakai adalah amalan di peringkat pertama, diikuti dengan amalan selepas era 1995. Dapatan ini menunjukkan bahawa amalan perakaunan pengurusan tradisional masih diguna pakai secara meluas oleh institutsi-institusi kewangan di Malaysia walapun amalan–amalan kontemporari (peringkat ke 4 dan ke atas) telah diperkenalkan. Bagi amalan pengurusan risiko, kebanyakan institusi telah melaksanakan kerangka Enterprise Risk Management (ERM) secara menyeluruh atau sebahagian. Amalan perakaunan pengurusan berkaitan penyata kewangan dan analisis nisbah dianggap sebagai memberikan sumbangan utama kepada pengurusan risiko. Kawalan belanjawan, belanjawan dan pengurusan strategik juga dianggap penting dalam pengurusan risiko operasi. Kata kunci: Perakaunan pengurusan; pengurusan risiko; institusi kewangan The aim of this paper is to report the results of a study on management accounting and risk management practices in financial institutions. The research method involved administering a questionnaire to 106 financial institutions listed on the Malaysian Central Bank’s website and the respondents were the chief financial officers (CFO) or the most senior positions in the finance department of the institutions. Based on the IFAC’s (1998) framework, it was found that the most widely practiced were the management accounting practices at Stage 1, followed by practices of Post 1995. This finding shows that despite the emergence of contemporary management accounting practices (Stage 4 onwards), traditional management accounting that focuses on financial performance and budgetary control is still widely practiced by financial institutions in Malaysia. As for the risk management practices, most of the firms have either implemented a complete or partial Enterprise Risk Management (ERM) framework. The findings from the survey showed that management accounting practices related to financial statement and ratio analysis were perceived to contribute most towards risk management. Budgetary control, budgeting and strategic planning were also perceived to be important in managing operational risks. Key words: Management accounting; risk management; financial institutions

Management accounting systems, enterprise risk management and organizational performance in financial institutions

2014 ◽  
Vol 22 (2) ◽  
pp. 128-144 ◽  
Author(s):  
Siti Zaleha Abdul Rasid ◽  
Che Ruhana Isa ◽  
Wan Khairuzzaman Wan Ismail
Keyword(s):  
Risk Management ◽  
Organizational Performance ◽  
Financial Institutions ◽  
Management Accounting ◽  
Enterprise Risk Management ◽  
Accounting Systems ◽  
Content Type ◽  
Management Accounting Systems ◽  
Enterprise Risk ◽  
And Control

Purpose – The purpose of this paper is to examine the linkages between management accounting systems (MAS), enterprise risk management (ERM) and organizational performance by examining MAS information characteristics that match ERM implementation and joint effects of MAS and ERM on organizational performance. Design/methodology/approach – The research method involved administering a questionnaire to 106 financial institutions (FIs) in Malaysia. The respondents were chief financial officers or staff members holding the most senior positions in the finance department of the institutions. Findings – The significant findings on the association between ERM and MAS show that implementation of ERM requires the use of sophisticated MAS information. ERM and MAS complement each other as both are integral to decision making, planning and control in an organization. The finding also substantiates the important role of ERM in enhancing non-financial performance. Research limitations/implications – This study covered only MAS as part of sub-control systems in an organization. Future studies could investigate the link between a more comprehensive management accounting and control system and ERM. Furthermore, this study used perceptual measures of MAS, ERM and organizational performance. Practical implications – The regulating body should promote best management practices of sophisticated MAS and ERM among FIs as these practices will create competitive advantage as well as help those institutions comply with regulations. Originality/value – This study has contributed to the body of knowledge on the linkages between MAS, risk management system and organizational performance.

scholarly journals Enterprise Risk Management Implementation of Financial Institutions in Ethiopia

2019 ◽  
Vol 9 (2) ◽  
pp. 5289-5295
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Secondary Data ◽  
Sampling Technique ◽  
Enterprise Risk Management ◽  
Insurance Companies ◽  
Chief Financial Officers ◽  
Primary Data ◽  
Senior Managers ◽  
Enterprise Risk

Recently, even though, more emphasis is given to enterprise risk management (ERM) worldwide to manage risks, there is scant knowledge and empirical evidence on ERM implementation of financial institutions in Ethiopia as there are only limited research works or literature related to ERM trends in Ethiopia. Thus, the main objective of this study was to assess the enterprise risk management implementation of financial institutions in Ethiopia. This study adopted a descriptive research design. In order to obtain relevant data for the study, both primary and secondary data sources were employed. The primary data were gathered through questionnaires while secondary data were extracted from different relevant sources such as books, journals, and websites. The population of the study was the entire banks and insurance companies in Ethiopia. At the time of the survey, there were 35 financial institutions (18 banks and 17 insurance companies) registered with the National Bank of Ethiopia and operating in Ethiopia. The unit of analysis were these institutions’ headquarter office chief risk officers, chief financial officers, senior managers, technical staff of risk management units and other employees whose work is related to risk management in each of the selected institutions. The sample responds were selected using a purposive sampling technique and a total number of sample respondent were 180. The data collected was analyzed and presented using descriptive statistics and the results were presented using pie charts, tables, and graphs. The results of the analyses revealed that the majority of the financial institutions in Ethiopia involved in the survey have a formal ERM in place even though the extent of ERM adoption varies from institution to institution. However, the results of the analysis show that ERM implementation level is low and in its infant stage in financial institutions in Ethiopia and these financial institutions have also less developed ERM practices than international organizations.

scholarly journals How Can Enterprise Risk Management Help in Evaluating the Operational Risks for a Telecommunications Company?

2021 ◽  
Vol 14 (3) ◽  
pp. 139
Author(s):  
José Ruiz-Canela López
Keyword(s):  
Risk Management ◽  
Banking Sector ◽  
Operational Risk ◽  
Field Work ◽  
Risk Identification ◽  
Enterprise Risk Management ◽  
Management Tool ◽  
Self Assessment ◽  
Operational Risks ◽  
Enterprise Risk

Operational risk is defined as the potential losses resulting from events caused by inadequate or failed processes, people, equipment, and systems or from external events. One of the most important challenges for the management of the company is to improve its results through its operational risk identification and evaluation. Most of Enterprise Risk Management (ERM) scholarship has roots in the finance/risk management and insurance (RMI) discipline, mainly in the banking sector. This study proposes an innovative operational risk assessment methodology (OpRAM), to evaluate operational risks focused on telecommunications companies (TELCOs), on the basis of an operational risk self-assessment (OpRSA) process and method. The OpRSA process evaluates operational risks through a quantitative analysis of estimates which inputs are the economic impact and the probability of occurrence of events. The OpRSA method is the “engine” for calculating the economic risk impact, applying actuarial techniques, which allow estimation of unexpected losses and expected losses distributions in a TELCO. The results of the analyzed business unit in the field work were compared with standardized ratings (acceptable, manageable, critical, or catastrophic), and contrasted against the company’s managers, proving that the OpRSA framework is a reliable and useful management tool for the business, and leading to more research in other sectors where operational risk management is key for the company success.

scholarly journals Effectiveness of Enterprise Risk Management Practices: A Case Study

2019 ◽  
Vol 10 (2) ◽  
pp. 213
Author(s):  
Hafizah Zainol Abidin ◽  
Siti Zaleha Abdul Rasid ◽  
Haliyana Khalid ◽  
Rohaida Basiruddin ◽  
Shathees Baskaran
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
Gap Analysis ◽  
Enterprise Risk Management ◽  
Web Based ◽  
Enterprise Risk ◽  
Telecommunication Companies ◽  
Planning Development ◽  
Current Risk

Enterprise risk management (ERM) is used to manage, integrate and aggregate all types of risks encountered by the concerned organisation. Despite having established framework and guidelines, the implementation of ERM at divisional level seemed to be lacking. There are gaps in the actual risk management practices that need to be studied and narrowed to ensure a more effective implementation of risk management. Therefore, the objective of this study is to identify characteristics of effective risk management practices and to gauge the effectiveness level at a telecommunication company. The gaps between the actual practices and the expected practices based on twenty-four (24) identified characteristics are identified and compared upon before recommendations are made to close the gaps and further enhance the risk management practices. For the purpose of this research the self-administered, web-based questionnaires were distributed to a total number of 130 engineers who were actively involved with network infrastructure planning, development and maintenance. The feedbacks received indicated that the respondents agreed with the identified characteristics of effective risk management practices and generally agreed that the effectiveness level of current risk management practices in the company is moderate or average. Furthermore, the gap analysis based on the variances indicates that there are rooms for further improvement. The study is important for more effective risk management practices in telecommunication companies. 

Enterprise risk management: history and a design science proposal

2018 ◽  
Vol 19 (2) ◽  
pp. 137-153 ◽  
Author(s):  
Michael McShane
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
Design Science ◽  
Enterprise Risk Management ◽  
Content Type ◽  
Research And Practice ◽  
Enterprise Risk ◽  
Risk Management Process ◽  
Management Concepts ◽  
Science Approach

Purpose This paper aims to investigate the evolution of enterprise risk management (ERM) out of fragmented disciplinary perspectives to provide a foundation for promoting interdisciplinary research and proposes a design science approach for more effective ERM implementation in organizations. Design/methodology/approach This conceptual paper synthesizes ERM research and practice from multiple disciplines. Findings Corporate risk management concepts were born in academic finance and developed further in the finance subset known as risk management and insurance. With the advent of ERM, efforts must broaden beyond applying statistical models to quantifiable risks. Other disciplines have expanded ERM research by embracing techniques to investigate risk management practices to produce knowledge that integrates practice and theory. ERM is promoted as integrated risk management, yet silos still remain in both practice and research. Originality/value This study provides a foundation and a proposal for moving ERM past academic and organizational silos, which is necessary to achieve the ERM philosophy and increase organizational resilience. Understanding the evolution and fragmented nature of ERM research and practice provides a foundation for interdisciplinary cooperation necessary to achieve the holistic ERM philosophy. A next frontier is effective ERM implementation. This paper argues for an organizational design science approach for mitigating the resistance to change that confounds effective implementation of ERM in organizations facing an increasingly uncertain environment and outlines future research for applying the approach to implementing the ISO 31000 risk management process.

scholarly journals Empirical investigation of risk management practices

2021 ◽  
Vol 26 (2) ◽  
pp. 79-98
Author(s):  
Vilma Nasteckienė
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
Empirical Investigation ◽  
Daily Basis ◽  
Linear Process ◽  
Enterprise Risk Management ◽  
Subject Matter Experts ◽  
Line Managers ◽  
General Managers ◽  
Enterprise Risk

In risk management research, dealing with known risks and helping companies foresee new risks are areas for subject matter experts. In practice, risk management is often perceived as a set of formal tools and procedures that must be delegated to the professionals. Despite this overall perception of risk, general managers, department managers, and other senior or line managers in organizations deal with questions associated with risk on a daily basis. They are, therefore, sometimes—even without consciously realizing it—involved in risk management practices. This article aims to analyze 'managers' involvement in risk management by empirically exploring how managers identify, assess, and respond to risks. Based on thematic analysis of observational and interview data, management practices used to manage risks were identified, and risk management as a non-linear process that is anchored on the strategic and operational levels and supported by learning from failures was defined. Two different ways of risk management can co-exist in an organization as a result of formal Enterprise Risk Management implementation.

scholarly journals Enterprise Risk Management Practices among Malaysian Firms

2014 ◽  
Vol 164 ◽  
pp. 332-337 ◽  
Author(s):  
Sara Soltanizadeh ◽  
Siti Zaleha Abdul Rasid ◽  
Nargess Golshan ◽  
Farzana Quoquab ◽  
Rohaida Basiruddin
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
Enterprise Risk Management ◽  
Enterprise Risk
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