scholarly journals Using digit analysis to evaluate financial reporting risk in the enterprise risk management process

2008 ◽  
Vol 6 (1-4) ◽  
pp. 443-448
Author(s):  
Shirley J. Daniel ◽  
Liming Guan ◽  
John P. Wendell
Keyword(s):  
Risk Management ◽  
Financial Reporting ◽  
Boards Of Directors ◽  
Enterprise Risk Management ◽  
Audit Committees ◽  
Management Tools ◽  
Rating Agencies ◽  
Enterprise Risk ◽  
Risk Management Process ◽  
Reported Earnings

Boards of Directors and their audit committees are responsible for the oversight of risk management for the enterprise. Because entities are being asked by rating agencies to more explicitly describe their enterprise risk management processes, boards and management will be well served to employ risk management tools to efficiently and effectively assist them in identifying areas of higher financial reporting risk. Studies using digit pattern analysis of earnings have consistently found that reported earnings are subject to misstatements due to inappropriate rounding. Recent actions by regulators make it clear that such misstatements, even when relatively small in magnitude, are unacceptable. This article provides guidelines and a new tool for preventing and detecting such misstatements

scholarly journals Peran Internal Audit dalam Implementasi Enterprise Risk Management berupa Pelaporan Kerusakan Prosedur Risiko.

2020 ◽  
Vol 14 (2) ◽  
Author(s):  
Indarti Indarti
Keyword(s):  
Risk Management ◽  
Internal Audit ◽  
Enterprise Risk Management ◽  
Audit Committees ◽  
Corporate Risk Management ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Enterprise Risk ◽  
Management Procedures ◽  
Corporate Risk

Implementation of Enterprise Risk Management (ERM) by Internal Audit in an orga-nization or company becomes important because Internal Audit is expected to help the organization achieve its objectives by approaching systematic and discipline to evaluate and improve the effectiveness of risk management, control, and governance process. As for which affects it is the involvement of internal auditors, the relation-ship of the audit committee with the internal auditor, and ERM.This study aims to analyze the involvement of Internal Audit in Enterprise Risk mana-gement implementation. Internal auditors should assist both management and audit committees in risk management responsibilities and supervisory roles by examining, evaluating, reporting and recommending improvements to the adequacy and effec-tiveness of risk management processes. An interesting issue is whether internal auditors involved in corporate risk management have a link to the willingness of internal auditors to report to the audit committee.The population in this study are the internal auditors and audit committees who working in companies manufacturing and financial services. The reason for determining the company is because the researcher wants to know how internal audit is involved in ERM implementation on that entity. The sample used in this research is internal auditor at private company and at Banking in this case internal auditor at local bank.The analytical method used is multiple regression analysis with SPSS version 23 pro-gram. The analysis technique used in this research is descriptive statistical analysis, classical assumption test, F-statistic hypothesis test to test influence together with 5% confidence level and use t-statistics to test partial regression coefficients. This re-search was conducted to analyze how much influence the role of Internal Audit in applying Enterprise Risk Management in the implementation of Audit.The result of this research is that the high level of internal auditor involvement in Enterprise Risk management implementation has no significant and significant im-pact on reporting of damage to risk management procedures. This indicates that the role of internal auditors in corporate risk management does not affect the reporting of damage to corporate risk management procedures. While the characteristics of strong relationships between internal auditors and audit committees positively and significantly influence the reporting of risk procedures, this indicates that internal audits that have strong internal audit-audit committee relationships strongly support internal auditors who have high involvement to report damage Greater risk procedures.

Enterprise Risk Management

2011 ◽  
pp. 125-142 ◽  
Author(s):  
Gary A. Stair
Keyword(s):  
Risk Management ◽  
Financial Reporting ◽  
Internal Control ◽  
Risk Mitigation ◽  
Enterprise Risk Management ◽  
Executive Management ◽  
Organizational Governance ◽  
Enterprise Risk ◽  
The Difference ◽  
Virtual Sales

How a company successfully implements an Enterprise Risk Management (ERM) program, to identify and manage potential risks, can mean the difference between financial freedom and financial despair. The Committee of Sponsoring Organizations (COSO) guidelines, a voluntary private-sector organization in the United States, has developed internal control guidelines to provide guidance to executive management and governance entities on critical aspects of organizational governance, business ethics, internal control, fraud, and financial reporting. This chapter will discuss an approach to build an ERM implementation plan within a pharmaceutical company by outlining the responsibilities and influences of industry participants, sales forces, middle-management and senior leadership and the ways in which they focus on monitoring and developing the risk mitigation process. The influences of technologies are integrated and new directions, such as e-media and e-detailing (Virtual Sales Representatives) are also explored.

scholarly journals Enterprise Risk Management: A Literature Review and Agenda for Future Research

2020 ◽  
Vol 13 (11) ◽  
pp. 281
Author(s):  
Sorin Gabriel Anton ◽  
Anca Elena Afloarei Nucu
Keyword(s):  
Risk Management ◽  
Literature Review ◽  
Organizational Factors ◽  
Enterprise Risk Management ◽  
Empirical Literature ◽  
Future Research ◽  
Enterprise Risk ◽  
Risk Management Process ◽  
Starting Point ◽  
Enterprise Level

The Enterprise Risk Management (ERM) process has heterogeneously developed across the world, although it represents a leading paradigm, supporting organizations to identify, evaluate, and manage risks at the enterprise level. Academics have studied the process, but there is no complete picture of the determinants and implications of such an integrated risk management process. Therefore, we present a systematic empirical literature review on ERM, based on a research protocol. The review highlights that the ERM literature can be divided into four general lines of research: the ERM adoption, the determinants of the ERM implementation, the effects of ERM adoption, and other aspects. In contrast to the richness of studies devoted to ERM engagement in small and medium-sized enterprises (SMEs), studies exploring ERM adoption in banks or insurance are relatively few. The literature review has revealed that the most frequently investigated effect of ERM is on firm performance. Little effort has been dedicated to the analysis of the effectiveness of ERM by its components and to institutional, individual, and organizational factors that affect ERM adoption. The study can serve as a starting point for scholars to explore research gaps related to ERM, while the practitioners can rely on the presented findings to identify the effects of the ERM implementation.

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 The Effectiveness of Enterprise Risk Management and Internal Audit Function on Quality of Financial Reporting in Universities

2017 ◽  
Vol 9 (4(J)) ◽  
pp. 230-241
Author(s):  
Wadesango N ◽  
Mhaka C.
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Financial Reporting ◽  
Internal Audit ◽  
Enterprise Risk Management ◽  
State Universities ◽  
Internal Audit Function ◽  
Enterprise Risk ◽  
The Impact

This study examined the impact of enterprise risk management (ERM) and internal audit function (IAF) on the financial reporting quality (FRQ) of state universities in Zimbabwe. Utilizing a dataset of 250 respondents from across nine (9) state universities, the researchers examined the effectiveness of ERM and the IAF on the quality of financial reporting in state universities. The researchers employed the contingency theory and studied each university separately to report on items that are specific to each and then also establish a commonality in the definition of parameters to be used in setting up the benchmark against which future performance may be measured. The findings were that there is a strong and significant relationship between ERM and the FRQ and also that there is a positive relationship between the internal audit function and FRQ. Quality internal audit results improved corporate governance systems. The results also underscore the significance and need for central government to establish and monitor a system of good ERM processes that minimize corporate governance breaches and enhance integrity and independence in financial reporting in state universities.

scholarly journals The role of enterprise risk management on disclosure transparency in the international financial reporting standards period

Accounting ◽  
2021 ◽  
Vol 7 (6) ◽  
pp. 1241-1250 ◽  
Author(s):  
Bisan Almasri
Keyword(s):  
Risk Management ◽  
Financial Reporting ◽  
Enterprise Risk Management ◽  
International Financial Reporting Standards ◽  
Future Research ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Enterprise Risk ◽  
Study Results

This research empirically investigates the role of the enterprise risk management system implementation level in capturing firm managerial incentives. The system plays an important role in understanding the association between international financial reporting standards and the capital market. Listed firms in the Australian market were used for the period 2000-2010 for this purpose. The study results imply that implementing higher levels of ERM by Australian firms during the mandatory IFRS adoption period does not capture firm incentives in IFRS period. Consequently, these results suggest that the implementation of ERM by Australian firms does not reduce the contractual costs between investors and management, whilst adopting IFRS does. Future research may use other techniques and/or strategies other than ERM, to capture the firm incentives, and as a result, may have economic consequences.

scholarly journals Does Audit Committee Characteristics Promote Risk Management Practices in Nigerian Listed Firms?

2021 ◽  
Vol 10 (2) ◽  
pp. 70
Author(s):  
Stephen A. Ojeka ◽  
Alex Adeboye ◽  
Olajide Dahunsi
Keyword(s):  
Risk Management ◽  
Board Of Directors ◽  
Audit Committee ◽  
Financial Risk ◽  
Enterprise Risk Management ◽  
Audit Committees ◽  
Listed Firms ◽  
Enterprise Risk ◽  
The Board Of Directors ◽  
Accounting Expertise

There has been a huge and deluge of risk threatening industries at an unequalled magnitude in recent times. As such, the board of directors and senior executives are increasingly expected to manage their various organizations' risk portfolios, affecting their financial performance. This has led to the assigning of the risk assessment role to the audit committee. The board of directors and its audit committee play an essential function in Enterprise Risk Management (ERM) by building up the right condition or tone-at-the-top. Given the board's responsibilities for representing the interests of shareholders, it plays a vital role in overseeing management's approach to ERM. This study examined the relationship between audit committee characteristics and risk management of some selected listed firms in a developing country like Nigeria. The study used secondary data to describe the dependent variable (financial risk decomposed into credit risk and liquidity risk) and the explanatory variables (decomposed into audit committee accounting expertise, audit committee meetings, audit committee independence and audit committee gender). The study used pair sample t-test, student t-test, Pearson Moment Correlation and random panel data estimator for twenty (20) selected listed firms for 2012-2016. Findings indicate that there is a negative between audit committee accounting expertise and financial risk. This revealed that Accounting Expertise in Audit Committees are likely to involve in activities and practices to curb financial risk. In addition, the Audit committee meeting indicates a negative relationship with credit risk. Audit committee gender and audit committee independence have a negative effect on liquidity risk. Therefore, this study recommends that Audit committees embrace Enterprise Risk Management (ERM) to manage risks effectively across the organization. Risk management processes should be one of the major points of discussion during audit committee meetings.

scholarly journals From Phishing To Advanced Persistent Threats: The Application Of Cybercrime Risk To The Enterprise Risk Management Model

2010 ◽  
Vol 14 (4) ◽  
Author(s):  
John W. Moore
Keyword(s):  
Risk Management ◽  
Financial Reporting ◽  
Internal Control ◽  
Enterprise Risk Management ◽  
Management Model ◽  
Material Weakness ◽  
Public Companies ◽  
Advanced Persistent Threats ◽  
Sarbanes Oxley ◽  
Enterprise Risk

This paper examines the issues of cybercrime in the context of risk to organizations.  In particular, it considers the control frameworks most commonly used by U.S. public companies to benchmark their internal controls over financial reporting.  It discusses the market for stolen identities, looking at the sources from which many of those identities are stolen.  It reviews the available internal control frameworks and explains how a firm’s risk of cybercrime might be classified as a material weakness under Sarbanes-Oxley Section 404.  It models how the use of COSO’s Enterprise Risk Management model could improve an organization’s chances of avoiding a serious incident.

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