scholarly journals Analysis on the Efficiency of Risk Management in the Chinese Listed Companies

Mathematics ◽  
2020 ◽  
Vol 8 (10) ◽  
pp. 1831
Author(s):  
Chien-Ming Huang ◽  
Wei Yang ◽  
Ren-Qing Zeng
Keyword(s):  
Risk Management ◽  
Firm Performance ◽  
Internal Control ◽  
Risk Taking ◽  
Information Disclosure ◽  
Production Efficiency ◽  
Listed Companies ◽  
Risk Indicators ◽  
Chinese Listed Companies ◽  
Low Efficiency

Since a firm’s profitability is associated with a degree of risk taking, risk indicators have been extensively treated as exogenous variables and affected firm performance. The level of risk taking should be determined through internal control quality and firm-specific characteristics to effectively understand the relationship between risk management and firm performance. This study aims to investigate the effects of risk management efficiency on the production efficiency of Chinese listed companies from 2002 to 2016 using the two-step data envelopment analysis (DEA) approach. Empirical results indicate that risk management differs from traditional financial theory, which means that high-level risk would earn high expected returns. Firms with a low efficiency index of enterprises risk management will have low performance. In particular, internal controls were significantly improved after the 2008 financial crisis. Our overall results also suggest that information asymmetry is still a problem in financial markets. To achieve maximum benefits for shareholders and improve the quality of information disclosure, methods for enacting market regulations are still very important issues in China.

scholarly journals Corporate Ownership Structure as a Determinant of “Risk Taking”: Insights from Italian Listed Companies

2020 ◽  
Vol 15 (11) ◽  
pp. 138
Author(s):  
Pier Luigi Marchini ◽  
Veronica Tibiletti ◽  
Alice Medioli ◽  
Gianluca Gabrielli
Keyword(s):  
Risk Management ◽  
Ownership Structure ◽  
Risk Taking ◽  
Listed Companies ◽  
Governance Structure ◽  
Interesting Case ◽  
Ownership Concentration ◽  
Contributing Factors ◽  
Corporate Transparency ◽  
Management Procedures

Ever since major accounting scandals and corporate collapses of the early 2000’s, the improved risk taking and the lax approach to risk management procedures, which are viewed as contributing factors to the market breakdown that occurred in the international market and, in particular, in the U.S. in 2007, have led to an increased awareness of the importance of managing risk on the part of listed companies. Risk management has gained importance in the definition of what it means to be the best and most efficient corporate governance structure and mechanism, as it can play a fundamental role in helping to achieve the company’s target. Also disclosure related to risk management is fundamental for the efficient functioning of capital markets since it helps to improve corporate transparency and to reduce the information asymmetry between insiders and outsiders. This paper aims to investigate the relationship between ownership structure and corporate risk-taking behavior and disclosure, as a tool for protecting shareholders, among Italian listed companies. The analysis is devoted to the Italian stock market because it is strongly characterized by a high ownership concentration and by the presence of a family ownership model; and this scenario makes the Italian one an interesting case to study. Based on a sample of 233 Italian listed companies, through a multivariate regression, we find that a high level of ownership concentration is positively related to a firms' low level of risk taking by the board of directors, so giving interesting insights to regulators and practitioners, as well as for further research.

scholarly journals Risks in the System of Accounting and Financial Statements

2021 ◽  
Vol 10 (525) ◽  
pp. 290-297
Author(s):  
S. M. Semenova ◽  
◽  
O. M. Shpyrko ◽  
H. V. Ziabchenkova ◽  
O. P. Kuzmenko ◽  
...  
Keyword(s):  
Risk Management ◽  
Financial Reporting ◽  
Internal Control ◽  
Information Disclosure ◽  
Reporting System ◽  
Management Accounting ◽  
Professional Judgment ◽  
Integrated Reporting ◽  
Effective Response ◽  
Reporting Systems

The article is concerned with studying the risks that are formed in the accounting and financial reporting system, their grouping and characterization for effective management and improvement of enterprise performance. Risk management standards clearly indicate the responsibility of management in assessing risks, managing and reporting them. The transformation of user approaches and needs to complete and reliable information about the risks of enterprises, in particular to the preparation of integrated reporting, indicates that the process of improving both the management and the reporting systems is underway. Accounting simultaneously acts as a function of risk management through the creation of reserves and provisions, a means of displaying risks and decisions about them through disclosure of information in the reporting, and is also a source of risk formation. The literature highlights the latter aspect the least. On the basis of the carried out research, the following groups of risks arising in the accounting and reporting system are determined: risks in the field of application of international (or national) accounting and reporting standards; absence (inefficiency) of management accounting, tax planning, internal control, independent audit; risks of errors and fraud; risks of adverse changes in legislation. For each group, the enterprise will be able to choose the most effective response measures through distribution (by creating reserves, insurance, diversification, outsourcing, developing accounting policies and job descriptions) and reducing risks (through investing in staff education: trainings, seminars, courses and motivation, updating accounting software, compiling and reporting, substantiating professional judgment, improving the internal control system, regulating management accounting, integrated reporting, system solutions). Thus, in order to increase the efficiency of risk management, of practical value should be taking into account the risks of accounting and reporting systems, if we consider them as a source of risks, and not only as an instrument for administration or information disclosure.

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