Special issue on perspectives of risk management – attenuation, leadership, incentives and complementation

Suresh Cuganesan (University of Sydney Business School, The University of Sydney, Sydney, New South Wales Australia)
Jim Rooney (University of Sydney Business School, The University of Sydney, Sydney, Australia)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 2 February 2015



Cuganesan, S. and Rooney, J. (2015), "Special issue on perspectives of risk management – attenuation, leadership, incentives and complementation", Managerial Auditing Journal, Vol. 30 No. 2. https://doi.org/10.1108/MAJ-01-2015-1150



Emerald Group Publishing Limited

Special issue on perspectives of risk management – attenuation, leadership, incentives and complementation

Article Type: Guest editorial From: Managerial Auditing Journal, Volume 30, Issue 2

Risk is an important concern for governments, regulators, industry and the broader community – so much so that some scholars argue that the implementation of risk management practices needs to occur alongside transparency of these practices to external constituents (Bhimani, 2009). Risk management necessarily intersects and shapes practices of strategy (Henkel, 2009), governance and organisational design (Cohen et al., 2013), and accounting (Kaplan and Mikes, 2012) amongst others. Despite its significance, there is insufficient research on the contexts and processes through which risks manifest, and what organisations might do to mitigate risk (Power, 2004; Cuganesan et al., 2014).

This Special Edition of Managerial Auditing Journal (MAJ) highlights the important role of risk management within the broader perspective of management performance and corporate governance. In this edition, we examine risk management from a number of important perspectives, with opportunities for debate and intellectual discourse at both a local and global level. The papers contained in this Special Edition examine different complexities and organisational contexts where risk and risk management exerts an influence, where management performance influences not only governance but also the risk perspectives and approaches that are adopted by corporate stakeholders. The aim is to continue the approach adopted by MAJ in taking readers beyond the traditional conventions of auditing.

These articles are based on a range of theoretical perspectives, ranging from positive to critical alternatives. The common theme is to explore perspectives that may explain phenomena in the challenging arena of risk management in its various guises. We publish four papers in this issue. Each paper covers a distinct and divergent perspective and context, whilst also simultaneously linking with one another on specific aspects of management performance, assurance and governance within the risk management context.

The first paper in this issue focuses on boards and their role in the attenuation of risk. Examining the important case of Centro, O’Donnell, Hicks, Streeter and Shantapriyan continue the theme of financial risk management and identify lessons for board members of Australian listed companies. By examining the implications of the judgment on the statutory duties of non-executive board members through the analysis of archival material, they consider the potential role of scepticism as found in audit and assurance functions. Whilst acknowledging the different roles of directors and auditors, the incorporation of specific forms of scepticism can enable directors to better fulfil their responsibility to shareholders.

Expanding the focus from Boards to include senior organisational executives, the second paper draws our attention to the influence of executive leadership and prior experience on the corporate governance of risk within the mature US financial market. By exploring failures in risk management and corporate governance within the financial services firm, Lehman Brothers, Rooney and Cuganesan focus on the relationship between the board (in particular outside directors) and executives in the assurance of risk management strategy. Examining the role of individual actor’s perceptions of risk and accounting as a calculative practice, it highlights the need for risk management expertise for board members independent of the domain expertise of company executives.

The third paper by Bhimani, Ncube and Sivabalan examines incentives for executives and risk management in the specific context of merger and acquisitions (M&A). They adopt a framework developed by Hess and Orphanides (2001) based on a political economy perspective, extending it into a corporate risk management domain. This framework is used to explore agency conflicts and resulting M&A decision-making behaviour that results in tension between the achievement of management and shareholder benefits. The paper by Bhimani et al. continues to consider the types of M&A activity that can benefit both managers and shareholders. Inter alia, it identifies opportunities to build multi-theory frameworks that may address more complex interactions between risk management and M&A activity.

The final paper in this special issue represents a useful complement to the previous in focusing not on a group of actors but the specific practice of assurance and its role in risk management. Sun, Alles and Vasarhelyi turn our attention to drivers and constraints affecting the adoption of continuous auditing in China. As an auditing technology used in developed countries like the USA, continuous auditing aims to address the demands of corporate owners and regulators for more efficient, effective and timely assurance to match the digital age of big data that we live in. While good governance is essential in the global environment, the accounting literature has generally focussed on the “best practice approach” of developed countries. As indicated in this paper, there has been very little empirical work undertaken to examine the barriers to improve corporate governance performance in developing countries, such as in China. Based on a conceptual exploration of primary and secondary documents addressing auditing and corporate governance of financial disclosure in China, Sun et al. identify that government intervention in business, the lack of competition, independence of auditors, the support from management and the continuous auditing specific regulations, as well as the technology gap between these two countries are the main barriers for the implementation of continuous auditing in China.

Collectively, the four papers published in this Special Edition on Risk Management provide a broad spectrum approach to risk management and corporate governance. Collectively, they acknowledge the influence of a number of factors, including a wide range of stakeholders, the political landscape and the specific cultural practices of corporations. Board competence and resulting performance can also influence the relationship between risk management and governance. Finally, examination of board quality and risk management expertise provides an overall integrated view of audit and assurance within the broader context of management performance and governance in this issue of MAJ.

Suresh Cuganesan and Jim Rooney, Joint Editors


Bhimani, A. (2009), “Risk management, corporate governance and management accounting: emerging interdependencies”, Management Accounting Research, Vol. 20 No. 1, pp. 2-5.

Cohen, D., Dey, A. and Lys, T. (2013), “Corporate governance reform and executive incentives: implications for investments and risk taking”, Contemporary Accounting Research, Vol. 30 No. 4, pp. 1296-1332.

Cuganesan, S., Guthrie, J. and Vranic, V. (2014), “Investigating the riskiness of performance measurement in the public sector: a review of progress and research agenda”, Financial Accountability and Management, Vol. 30 No. 3, pp. 279-302.

Henkel, J. (2009), “The risk-return paradox for strategic management: disentangling true and spurious effects”, Strategic Management Journal, Vol. 30 No. 3, pp. 287-303.

Hess, G. and Orphanides, A. (2001), “War and democracy”, Journal of Political Economy, Vol. 109, pp. 776-810.

Kaplan, R.S. and Mikes, A. (2012), “Managing risks: a new framework”, Harvard Business Review, pp. 48-60.

Power, M.K. (2004), The Risk Management of Everything, Demos, London.

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