The Implementation of Fraud Risk Assessment and Anti-Fraud Strategy in Government Institution XYZ

Government Institution XYZ is one of the government institutions trying to build bureaucratic reform and minimize fraud risk. This study attempted to conduct a fraud risk assessment to identify, analyze, evaluate, and determine appropriate anti-fraud strategies to various fraud risk scenarios that may occur in Government Institution XYZ. The research was conducted qualitatively with a case study approach. The data were collected through document analysis, questionnaires, interviews, and Focused Group Discussion (FGD). Based on the FRA results, researchers identified thirteen fraud risk scenarios that organization needs to anticipate. Considering the organization’s risk appetite, there are two very high-level risk scenarios, four high-level risk scenarios, four medium-level risk scenarios, and three low-level risk scenarios among all of these risk scenarios. Several anti-fraud strategies need to be implemented to reduce fraud risk, including preventive, detective, and responsive strategies by optimizing existing and other relevant anti-fraud strategies.

Enterprise Risk Management (ERM) Practices to Achieve Long Term and Sustainable Organization’s Goals: Case of Institut Teknologi Bandung (ITB)

Every choice made in the pursuit of objectives has its risks. From day-to-day operational decisions to the fundamental trade-offs in the boardroom, dealing with uncertainty in these choices is a part of the organizational lives. A strategy is nothing more than a commitment to a set of coherent, mutually reinforcing policies or behaviours aimed at achieving a specific competitive goal. In order to ensure the implementation of efforts and the allocation of resources to achieve strategic goals, top management should conduct integrated risk management practices to all activities/initiatives of the organization’s management, both individually and collectively. Risk management is an intrinsic part of business planning and decision making. No direction is taken without looking at the potential risks and comparing them against the organization’s risk appetite. This paper aims to research in general the practice of enterprise risk management within Institut Teknologi Bandung (ITB) as a well-known and public-state-owned university in Indonesia. This research concludes that the enterprise risk management implementation is not fully implemented yet within ITB as an enterprise. Almost all respondents agree that the implementation of enterprise risk management has a positive and significant influence on the organization’s objectives achievement. Improving university performance overall will require an effective enterprise risk management practice. Author highly recommends ITB to adopt risk management practice based on ISO-31000 standard, and it can be combined with other risk management standards available nowadays if necessary. ITB needs to start the implementation at the soonest as possible, in order to maintain its strategic position as a top university in Indonesia, increase its competitive advantages to compete in the global scale, and at the same time achieving its vision and mission in a long-term and sustainable manner.

Identification of Factors Affecting Risk Appetite of Organizations in Selection of Mega Construction Projects

Risk appetite is a crucial component that plays a key role in the decision-making process of project risk management. Despite rising scholarly interest in project risk management, risk appetite has received little attention thus far. A well-defined risk appetite ensures that all decisions taken throughout the course of a project are consistent with an organization’s ultimate strategic aim. This research aims to identify the factors affecting the risk appetite of megaproject selection in the construction sector. The study adds to the knowledge of risk appetite in mega construction project selection and qualitatively examines the factors affecting risk appetite. Exploratory research design is used to identify these factors. The factors are identified using semi-structured interviews of 30 practitioners from the top and middle management working on mega construction projects. Thematic analysis was performed using NVIVO academic software. The most highlighted factors are financial attributes, board of directors’ agility, political factors, project location and demographics. The proposed conceptual framework identifies the factors affecting the risk appetite of mega construction project selection. These factors may be utilized as a starting point by construction project organizations to evaluate the risk appetite of a mega construction project. Risk appetite-based project selection will decrease chances of failures, delays, and cost overruns in mega-projects. These factors can be used by researchers as a rationale for developing predictive or descriptive models of project selection based on risk appetite.

Using Artificial Neural Networks to Support the Decision-Making Process of Buying Call Options Considering Risk Appetite

During the COVID-19 pandemic, uncertainty has increased in many areas of both business supply and demand, notably oil demand and pricing have become even more unpredictable than before. Thus, for companies that buy large quantities of oil, effective oil price risk management is crucial for business success. Nevertheless, businesses’ risk appetite, specifically willingness to accept more risk to achieve desired business benefits, varies significantly. The aim of this paper is to deepen the analysis of the effectiveness of employing artificial neural networks (ANNs) in hedging against oil price changes by searching for buy signals for European WTI (West Texas Intermediate) crude oil call options, while taking into account the level of risk appetite. The number of generated buy signals decreases with increasing risk appetite, and thus the amount of capital necessary to buy options decreases. However, the results show that fewer buy signals do not necessarily translate into lower returns generated by networks in a given class. Thus, higher levels of return on the purchase of call options may be obtained. The conducted analyses clearly proved that ANNs can be a useful tool in the process of managing WTI crude oil price change risk. Using the analyzed network parameters, up to 29.9% of the theoretical maximum possible profit from buying options every day was obtained in the test set. Furthermore, all proposed networks generated some profit for the test set. The values of all indicators used in the analyses confirm that the ANNs can be effective regardless of the level of risk appetite, so in this respect they may be described as a universal decision support tool.

Bursting balloons - comparison of risk taking between extreme sports, esports, and the general public

Arguably, extreme sports athletes exhibit a more significant risk appetite than the general public. Are standard behavioral risk measures able to capture this? To answer this question, we assessed self-reports of risk taking and measured the risk-taking behavior of samples of snowboarders and climbers. Two groups of non-athletes, university students and crowdworkers, and athletes of a sport that does not include the potential of grave injury or death, esports athletes, serve as control conditions and complement our study. Across these five different groups, 1313 participants performed an online version of the Balloon Analogue Risk Task (BART) and gave self-reports of general willingness to take risks and sports-specific risk taking. Extreme sports athletes exhibited greater risk taking in the BART than non-athletes and esports athletes. Furthermore, BART-performance predicted sports-specific risk taking and its affective consequences. Our results speak to the BART’s ecological validity and the unique role of physical consequences on risk-taking behavior.

Enterprise Risk Management and Risk Culture in Construction Public Listed Companies

Inadequate risk management and lack of risk culture can expose a company to unexpected risk events, which can negatively affect its performance. However, there are inconsistencies in suitable dimensions to measure the enterprise risk management (ERM) construct, as well as insufficient embedding strategies for risk culture. This study aims to identify the ERM practices and risk culture dimensions among the Malaysian construction public listed companies (PLCs). The roles of top management and chief risk officer/risk manager in influencing ERM and risk culture are also explored. A total of 46 annual reports and 10 interviews of industry practitioners were analysed using content analysis. The analysis of the annual reports found that risk policy and risk appetite/tolerance, monitoring key risk and accountability are the three dimensions of risk culture. In addition, based on the interviews, reward and recognition and internal relationships were identified as the two dimensions of risk. Top management and risk manager were found to be the primary drivers of ERM programme and risk culture in construction PLCs. The results of this study are used to formulate a survey instrument for the subsequent data collection to test the proposed theoretical model.

DESAIN ENTERPRISE RISK MANAGEMENT PADA PERGURUAN TINGGI DI STIE MUHAMMADIYAH JAKARTA

Tujuan dari penulisan ini adalah untuk menganalisis penerapan manajemen risiko pada perguruan tinggi di Sekolah Tinggi Ilmu Ekonomi Muhammadiyah Jakarta. Metode penelitian menggunakan desain penelitian eksploratif, karena tujuan penelitian ini adalah untuk memahami permasalahan manajemen risiko pada STIE Muhammadiyah Jakarta. Data diperoleh dengan melakukan wawancara dan barinstorming dengan ketua program studi, kepala bagian, dan kepala Lembaga STIE Muhammadiyah Jakarta, juga dengan menggunakan data sekunder yaitu jumlah mahasiswa, jumlah, dosen, dan data lainnya. Tahapan analisis dilakukan melalui identifikasi risiko, penilaian dan evaluasi risiko, perencanaan mitigasi risiko dan analisis serta interpretasi data. Berdasarkan hasil identifikasi risiko, terdapat 5 risiko inherent yang bisa berdampak signifikan terhadap sustainability STIE MJ. Berdasarkan risk profile dari kelima identifikasi risiko, risiko 1 berdampak kualitatif terhadap penurunan peringkat akreditasi, risiko kedua dan ketiga berdampak terhadap tidak tercapainya sasaran kinerja, risiko keempat dan kelima dapat berdampak terhadap penurunan klasterisasi Nasional Perguruan Tinggi. Dampak kuantitatif risiko 1-3 berdampak terhadap kerugian institusi, risiko no. 4 dan 5 berdampak terhadap rendahnya penyerapan anggaran (cost center). Beberapa risiko memerlukan penangan dalam waktu yang tidak singkat seperti risiko 4 dapat mengakibatkan risiko residual tidak sesuai dengan target risiko yang diharapkan (risk appetite), sehingga diperlukan penanganan risiko secara berkelanjutan. Penelitian ini memiliki keterbatasan yaitu identifikasi risiko tidak dilakukan secara mendalam pada semua unit kerja. Penelitian mendatang diharapkan agar identifikasi risiko dilakukan pada semua unit kerja di Perguruan Tinggi, sehingga risiko yang ada dapat segera dimitigasi dan dilakukan perbaikan segera.

Enterprise capital - Definition, theory and determinants of the structure

Purpose of the study: The main goal of the article is to define the company's capital, the concept of which in the literature is insignificant and broad. The subject of the research is also the characteristics of the capital structure and the factors that determine it. Methodology: The main research method was a critical review of the literature in the field of shaping the capital structure of enterprises, also in the perspective of the evolution of the theory of the optimal capital structure and the factors determining it. Main findings: The most common definition of capital describes this concept as a source of financing for the activities of an enterprise, and therefore equates it with the balance sheet concept of liabilities. The sources of origin of funds financing business activities forces the managers to search for their optimal structure ensuring the proper relationship between the planned profit and the acceptable level of risk. The literature presents many theories of capital structure and factors shaping it. When shaping the share of equity and borrowed capital in the total of liabilities, one should take into account the business sector of the enterprise, its environment and the risk appetite of the managers. Application of the study: The presented attempt to define the company's capital is in line with the considerations on this subject so far and aims to standardize this concept in the literature. The cross-section of the theory of capital structure allows for a historical approach to this issue and confirmation of the multidimensionality of the presented issues. The presented factors shaping the capital structure of enterprises specify the areas on which managers should focus when looking for an optimal relationship of equity and foreign capital. Originality/Novelty of the study: The issue of defining capital and its optimal structure is not new in the literature. However, it requires permanent analysis, which is conditioned by the volatility of macroeconomic and microeconomic conditions. Difficulties in a universal approach to this subject also force detailed research in specific industries and economic conditions.

The Impact of The Covid-19 Pandemic on Investor Risk Tendency: The Case of Turkey

Introduction and Aim: It is an important issue that what kind of changes occur in the risks that people face in the face of emerging problems and the role of people in possible pandemics in the last twenty years and in the future. The solution of the problems that arise in the control and management of these risks attracts the attention of many researchers. In this study, the causality effect of the COVID-19 pandemic on risk appetites representing the attitudes and behaviors of securities investors. Materials and Methods: In the study; To represent the pandemic, weekly time series data of the number of COVID-19 cases (COVID) and the Risk Appetite index (RISK) announced by the Central Registry Agency for the period 30.03.2019-30.08.2021 were used. In order to determine the causality relationship, the Hatemi-J Causality test was performed. Results: It was determined that the negative shocks of the COVID variable were a cause of the positive shocks of the RISK variable at a statistical significance level of 1%. Conclusion and Suggestions: The effect of the pandemic process on the investment decisions of the investors is reduced, with the expectation that the economy and financial markets will improve, positively affecting the behavior and risk perceptions of the investors, and this expectation causes the investment behavior and risk appetite to increase. can be expressed. Keywords: COVID-19, Risk appetite, Pandemic, Hatemi-J