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Open Access
Article
Publication date: 20 March 2024

Marziana Madah Marzuki, Wan Zurina Nik Abdul Majid, Hatinah Abu Bakar, Effiezal Aswadi Abdul Wahab and Zuraidah Mohd Sanusi

This paper investigates the relationship between risk management practices and potential fraudulent financial reporting in Malaysia by considering recent regulatory reforms of the…

Abstract

Purpose

This paper investigates the relationship between risk management practices and potential fraudulent financial reporting in Malaysia by considering recent regulatory reforms of the Malaysian government on risk management practices.

Design/methodology/approach

The sample of this study was based on 257 firm-year observations during the 2012–2017 period. This study employed panel-least square regressions with period fixed effects.

Findings

This study found a significant association between risk management activities in the disclosure and potential fraudulent financial reporting. Nevertheless, this study found there is insignificant effect of the risk-management committee in reducing potential of fraudulent financial reporting.

Originality/value

This study is a pioneer research that relates firms’ risk management practices with potential fraudulent financial reporting measured by F-score. Thus, this study provides an insight to regulators on the extent of risk-management practices in deterring potential fraudulent financial reporting which can be used as an input for greater enforcement of risk-management regulations.

Details

Asian Journal of Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2459-9700

Keywords

Article
Publication date: 11 July 2023

João Henrique Lopes Guerra, Fernando Bernardi de Souza, Silvio Roberto Ignácio Pires and Anderson Luiz Ribeiro de Sá

Supply chains are among the most important, complex and risky systems in the modern world. Thus, managing risk is no longer an option, but a fundamental process in organizations…

Abstract

Purpose

Supply chains are among the most important, complex and risky systems in the modern world. Thus, managing risk is no longer an option, but a fundamental process in organizations. Given the lack of pathways that guide companies toward supply chain risk management (SCRM), the purpose of this study is to provide a conceptual reference, in the form of a maturity model, to support them in the evolution and improvement of this process.

Design/methodology/approach

The proposal covered a broad literature review, a survey and a multiple case study. The research was conducted in the aerospace industry and included companies from the supply chain of a leading aircraft manufacturer.

Findings

The model elaborated with the research results has eight attributes and four levels, addressing critical issues for SCRM to achieve its scope and purposes. The attributes include the structuring and scope of the SCRM process, the importance it receives within the organization, the resources used and the qualification of employees, the role of leadership and the inter-organizational collaboration.

Practical implications

Managing risk along supply chains is particularly challenging, demands resources and knowledge and requires a continuous effort. The proposed model offers a reference for improvement, helping to identify areas that need to be strengthened and practices to be implemented. Thus, it can guide the focus and efforts in a more efficient and systematic way, in addition to support evaluations and comparisons.

Originality/value

Although maturity models are abundant in different fields and several are available for risk management, models specifically developed for SCRM are scarce. This study broadens the understanding of SCRM with novel insights about how to improve this process in an evolutionary way. While many researchers focused their efforts on the SCRM process steps, this study identified critical issues that transcend these steps. The research was carried out in a sector with a long tradition in risk management and included companies belonging to a same supply chain, that is, using an approach still little explored in studies on SCRM or risk management maturity models.

Details

Supply Chain Management: An International Journal, vol. 29 no. 1
Type: Research Article
ISSN: 1359-8546

Keywords

Article
Publication date: 27 June 2023

Arsalan Safari, Vanesa Balicevac Al Ismail, Mahour Parast, Ismail Gölgeci and Shaligram Pokharel

This systematic literature review analyzes the academic literature to understand SC risk and resilience across different organizational sizes and industries. The academic…

Abstract

Purpose

This systematic literature review analyzes the academic literature to understand SC risk and resilience across different organizational sizes and industries. The academic literature has well discussed the causes of supply chain (SC) risk events, the impact of SC disruptions, and associated plans for SC resilience. However, the literature remains fragmented on the role of two fundamental elements in achieving SC resilience: the firm's size and the firm's industry as firms' contingent factors. Therefore, it is important to investigate and highlight SC resilience differences by size and industry type to establish more resilient firms.

Design/methodology/approach

Building upon the contingent resource-based view of the firm, the authors posit that organizational factors such as size and industry sector have important roles in developing organizational resilience capabilities. This systematic literature review and analysis is based on the structural and systematic analysis of high-ranked peer-reviewed journal papers from January 2000 to June 2021 collected through three global scientific databases (i.e. ProQuest, ScienceDirect, and Google Scholar) using relevant keywords.

Findings

This systematic literature review of 230 high-quality articles shows that SC risk events can be categorized into demand, supply, organizational, operational, environmental, and network/control risk events. This study suggests that the SC resilience plans developed by startups, small and mdium-sized enterprises (SMEs), and large organizations are not necessarily the same as those of large enterprises. While collaboration and networking and risk management are the most crucial resilience capabilities for all firms, applying lean and quality management principles and utilizing information technology are more crucial for SMEs. For large firms, knowledge management and contingency planning are more important.

Originality/value

This study provides a comprehensive review of the literature on SC resilience plans across different organizational sizes and industries, offering new insights into the nature and dynamics of startups', SMEs', and large enterprises' SC resilience in different industries. The study highlights the need for further investigation of SC risk and resilience for startups, SMEs, and different industries on a more detailed level using empirical data. This study’s findings have important implications for researchers and practitioners and guide the development of effective SC resilience strategies for different types of firms.

Details

The International Journal of Logistics Management, vol. 35 no. 2
Type: Research Article
ISSN: 0957-4093

Keywords

Article
Publication date: 29 March 2024

Ruchi Agarwal

This study aims to explore the adoption of enterprise risk management (ERM) in developing and developed countries. Is there a similarity or difference between the two contrasting…

Abstract

Purpose

This study aims to explore the adoption of enterprise risk management (ERM) in developing and developed countries. Is there a similarity or difference between the two contrasting institutional markets and the reasons behind them?

Design/methodology/approach

The adoption of ERM is analyzed on the basis of the institutional framework. The author draws empirical evidence by comparing the cases of a British and an Indian insurance company using evidence from multiple sources. This paper focuses on extra-organizational pressures exerted by economic, social and political situations across two countries that influenced the adoption decision of ERM.

Findings

The findings of this research revealed that early adopters of ERM in different institutional markets face coercive and normative pressure but not mimetic pressure. The adoption of ERM in India and the UK is dissimilar. Companies in the British insurance market encounter higher institutional forces than those in the Indian market because of higher coercive and normative pressure. The aspirations to adopt ERM in the Indian and UK markets included improved strategic decision-making to maintain stakeholder expectations and higher standards of corporate governance. In the UK, ERM was adopted to reduce surprises and fluctuations under flexible regulations but with stricter adoption and to improve credit ratings.

Originality/value

Previous literature has discussed ERM adoption in similar markets or within one market with similar institutional pressure. In contrast, this research is a comparative study that explains the analysis of institutional theory in two different institutional environments in the adoption of ERM.

Details

Journal of Accounting & Organizational Change, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 3 January 2024

Ralitsa Arnaudova, Evi Viza and Michele Cano

The Scottish economy was experiencing steady growth prior the hit of the COVID-19, with the pandemic causing the government to announce extreme lockdown measures with…

Abstract

Purpose

The Scottish economy was experiencing steady growth prior the hit of the COVID-19, with the pandemic causing the government to announce extreme lockdown measures with unprecedented impact on small and medium-sized enterprises (SMEs). Whilst some of the industry sectors in Scotland took a lighter hit, a large part of the organizations had to either adapt or completely disrupt their business. An essential aspect of their survival, risk management (RM) was among the areas requiring the most significant acceleration. This study compared the RM practices implemented by Scottish SMEs prior and after the outbreak as well as examined the attitudes of key decision-makers in the SMEs in relation to risk, including their perceived readiness for another crisis of similar significance.

Design/methodology/approach

An online survey based on ISO 31000 RM guidelines was distributed to 232 Scottish SMEs. Based on the official government reports and existing knowledge on how SMEs around the world have handled crisis events within the past 20 years, the authors developed the hypothesis that crisis events significantly accelerate SMEs' RM implementation. Around 13 items were tested in relation to the hypothesis and responses were tested via two-tailed T-test to establish significant statistical difference.

Findings

The research provides insight into the current state of risk management practices implemented by Scottish SMEs. As expected, SMEs showed significant difference in their RM implementation prior and after the COVID-19 outbreak. Whilst this has been viewed as a positive, motivations, priorities and approaches in managing risk demonstrated by the SMEs is questionable with views to their sustainable long-term recovery. The study highlights the lack of confidence instilled within the SMEs that they can handle another crisis of similar significance and provides directions for further investigation and improvements with the aim of helping the SMEs prepare better to mitigate the consequences of future crisis events.

Originality/value

In academic sense, the study offers a tested universal framework and a detailed questionnaire for assessment of RM strategy, applicable to organisations of various type, size and geography. Several implications with regards to managerial practices have been highlighted, including the neglect of the SMEs’ own internal environments and its significance in their risk strategies, the predominantly reactive approach to RM displayed by most Scottish SMEs as well as the neglect of compliance risk leading to potential quality and customer satisfaction issues preventing SMEs from full post-crisis recovery.

Details

The TQM Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-2731

Keywords

Open Access
Article
Publication date: 6 February 2024

Abdelmoneim Bahyeldin Mohamed Metwally and Ahmed Diab

In developing countries, how risk management technologies influence management accounting and control (MAC) practices is under-researched. By drawing on insights from…

Abstract

Purpose

In developing countries, how risk management technologies influence management accounting and control (MAC) practices is under-researched. By drawing on insights from institutional studies, this study aims to examine the multiple institutional pressures surrounding an entity and influencing its risk-based management control (RBC) system – that is, how RBC appears in an emerging market attributed to institutional multiplicity.

Design/methodology/approach

The authors used qualitative case study research methods to collect empirical evidence from a privately owned Egyptian insurance company.

Findings

The authors observed that in the transformation to risk-based controls, especially in socio-political settings such as Egypt, changes in MAC systems were consistent with the shifts in the institutional context. Along with changes in the institutional environment, the case company sought to configure its MAC system to be more risk-based to achieve its strategic goals effectively and maintain its sustainability.

Originality/value

This research provides a fuller view of risk-based management controls based on the social, professional and political perspectives central to the examined institutional environment. Moreover, unlike early studies that reported resistance to RBC, this case reveals the institutional dynamics contributing to the successful implementation of RBC in an emerging market.

Details

Qualitative Research in Accounting & Management, vol. 21 no. 2
Type: Research Article
ISSN: 1176-6093

Keywords

Open Access
Article
Publication date: 26 May 2023

Sasha Romanosky and Elizabeth L. Petrun Sayers

The purpose of this study is to examine how companies integrate cyber risk into their enterprise risk management practices. Data breaches have become commonplace, with thousands…

2379

Abstract

Purpose

The purpose of this study is to examine how companies integrate cyber risk into their enterprise risk management practices. Data breaches have become commonplace, with thousands occurring each year, and some costing hundreds of millions of dollars. Consequently, cyber risk has become one of the gravest risks facing organizations, and has attracted boardroom-level attention. On the other hand, companies already manage many kinds of difficult and growing risks, and that firms lose less than 1% of annual revenues as a result of cyber incidents. Therefore, how should firms appropriately address cyber risk? Is it indeed a materially different kind of risk area, or is it simply just one more risk that can seamlessly be integrated into existing enterprise risk management (ERM) practices?

Design/methodology/approach

The authors performed thematic analysis based on semi-structured interviews, with non-probabilistic, purposive sampling, to answer two main questions. First, how do firms manage enterprise risks, generally? And second, how are they integrating cyber risk into these existing processes?

Findings

The authors find that there is considerable variation in the approach and sophistication in ERM practices, such as whether they are driven more like an auditing function, or as a risk champion. The authors also find that despite the novelty of cyber risk, it can be integrated like other enterprise risks, and that cyber risk is most often seen as an operational risk (similar to workplace accidents or fraud), rather than a strategic risk, emerging from, for example, technology innovation and R&D.

Research limitations/implications

The generalization of the results is limited by the sample size and variation of firms interviewed. While the authors attempted to interview enterprise risk managers across a wide variation of firms, there were clear limitations in the scope. That being said, the authors were fortunate to be able to examine ERM and cyber risk practices across small and large, private and publicly traded companies, from a variety of business sectors.

Practical implications

The authors believe these finding are important because they present evidence that while cyber risk may be new, it does not require specialized handling or processes to track it at the enterprise level. While some firms may choose to provide special accommodations or attention because of their data collection or business practices, this approach is neither necessary nor required of all firms in all situations.

Originality/value

This research is one of the only papers that, to the best of the authors’ knowledge, examines how cyber risk is integrated at an enterprise level.

Details

Management Research Review, vol. 47 no. 1
Type: Research Article
ISSN: 2040-8269

Keywords

Article
Publication date: 18 April 2023

Abdul Rashid, Muhammad Akmal and Syed Muhammad Abdul Rehman Shah

This study aimed at exploring the differential effects of different corporate governance (CG) indicators on risk management practices in Islamic financial institutions (IFIs) and…

Abstract

Purpose

This study aimed at exploring the differential effects of different corporate governance (CG) indicators on risk management practices in Islamic financial institutions (IFIs) and conventional financial institutions (CFIs) of Pakistan. It also investigated the moderating role of institutional quality (IQ) in shaping the effects of CG practices on financial institutions of Pakistan.

Design/methodology/approach

A sample of 57 financial institutions including commercial banks, insurance companies and Modarba companies over the period 2006–2017 is used to carry out the empirical analysis. The authors applied the robust two-step system-generalized method of moments estimator, which is also called the dynamic panel data estimator. They also built the PCA-based composite index of CG and IQ by using different indicators to investigate the moderating role of IQ. They used three proxies for risk taking, five for CG and one for Shari’ah governance. To test the validity of the instruments, they applied the Arellano and Bond’s (1991) AR (1) and AR (2) tests and the J-statistic of Hansen (1982).

Findings

The results provided strong evidence that several individual characteristics of CG and the composite index are significantly related to the operational risk, the liquidity risk and the Z-score (a proxy for solvency risk). The results also revealed that IQ significantly and substantially contributes in reducing the level of risks. Finally, the estimation results indicated that the effects of CG on risk management are significantly different at IFIs and CFIs. This differential impact is mainly attributed to the fundamental differences in business models, operational strategies and contractual obligations of both types of institutions.

Practical implications

The findings of this study are important for enhancing our understanding of how CG relates to risk taking in Islamic and conventional financial services industries and how good quality institutions are important for formulating the governance effects on the risk-taking behavior of financial institutions. The findings suggest that a suitable size of board should be chosen to manage the risk effectively. As the findings show that the risk-taking behavior of IFIs differs from that of CFIs, the regulators and international standard setting bodies should tailor the regulatory frameworks accordingly.

Originality/value

This paper is different from the existing studies in four aspects. First, to the best of the authors’ knowledge, this is the first empirical investigation in Pakistan, which does the comparison of IFIs and CFIs while examining the impacts of CG on risk management. Second, the paper constructs the composite index of CG by considering several different indicators of governance and examines the combined effect of governance indicators on risk management process. Third, this paper adds to the growing literature on the role of IQ by investigating whether it acts as a moderator between CG structures and risk management and if yes, then whether this moderating role is different for IFIs and CFIs. Finally, the paper builds upon the existing research work on the CG effects for different types of financial institutions by proposing a single regression based analytical framework for comparing the effects across two different types of institutions, harvesting the benefits of higher degrees of freedom and avoiding/minimizing the measurement error.

Details

Journal of Islamic Accounting and Business Research, vol. 15 no. 3
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 6 September 2022

Murat Cevikbas, Ozan Okudan and Zeynep Işık

The purpose of this paper is to propose a disruption claim management (DCM) life cycle and a risk management framework to provide comprehensive guidance to construction…

Abstract

Purpose

The purpose of this paper is to propose a disruption claim management (DCM) life cycle and a risk management framework to provide comprehensive guidance to construction practitioners for facilitating effective and efficient DCM.

Design/methodology/approach

DCM life cycle was initially developed through a focus group discussion (FGD) with the participation of the construction practitioners who have diverse experiences about DCM. The life cycle is comprised of 6 phases and also includes proper reactions of the owners and contractors. Then, 42 risk factors that can impact the deliverables of DCM were identified through a literature review and an additional FGD session. This was then followed by a Fuzzy Analytical Hierarchy Process (FAHP) which was performed to evaluate the importance of each risk factor in terms of the factor's impact on the success of DCM. Additionally, consistency analysis was performed to further maximize the reliability of the results.

Findings

Findings revealed that a proactive and systematic approach should be adopted and DCM practices should be initiated before any disruption event is triggered. Accordingly, the proposed framework recommends DCM practices to be initiated early in the contract development phase since compensation for the disruption might be recovered only to the extent that the contract permits. The contract-related risks were given top priority by the experts so that the results of the fuzzy AHP analysis also verified the significance of the contract development phase. Besides contract-related risks, risks related to insufficient site observation, ignorance of the project team, cognitive bias and conflict of interest were determined as the most significant DCM risks, needing an urgent and sophisticated risk response plan. Lastly, results suggested that “Site observation and record-keeping” is the most formidable phase since the phase's implementation on a continuous basis could create unforeseen organizational challenges such as mismanagement of project records, especially in the dynamic and turbulent environment of the construction projects.

Originality/value

Disruption – which is caused mostly by change – is inevitable in construction projects due to their sophisticated nature. DCM, therefore, becomes crucial to compensate losses of contractors and eliminate or diminish the prolonged dispute resolution process. Existing studies, however, do not provide a comprehensive theoretical basis for the DCM life cycle and DCM life cycle's potential risks so that DCM life cycle's promising benefits can hardly be materialized. Thus, developing a DCM life cycle and associating DCM life cycle with risk management, this study is highly believed to make a promising theoretical contribution to the DCM domain since this is one of the earliest attempts in the literature. Additionally, this research provides construction practitioners with an insight into the effective implementation of DCM practices in construction projects.

Details

Engineering, Construction and Architectural Management, vol. 31 no. 1
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 19 January 2024

Mohamed Elkbuli, Nurhidayah Azmy and Chia Kuang Lee

Although there has been an increase in the application of a variety of robust technologies and systems, the oil and gas sector relies on project managers’ soft skills for success…

Abstract

Purpose

Although there has been an increase in the application of a variety of robust technologies and systems, the oil and gas sector relies on project managers’ soft skills for success because of their vital role. Therefore, this study aims to explore the profound influence of project managers’ soft communication skills on successful risk management within Libya’s oil and gas projects.

Design/methodology/approach

A review of relevant literature and a quantitative approach through the administration of a questionnaire were used to determine factors impacting risk management implementation related to managerial communication skills. A total of 246 valid responses were received from the oil and gas companies in Tripoli, Libya. Partial least squares structural equation modelling was used to examine the direct and moderating relationship drawn by the hypotheses.

Findings

The findings suggest that managerial soft skills may be used to improve continuous risk management processes and intra-project communication. It was found that the experience is strengthening the positive relationship between written communication soft skills and project risk management implementation among Libyan oil and gas construction projects.

Originality/value

This study defines project managers’ soft communication skills and analyzes project managers’ soft communication skills with the role of experience as a moderator. This paper presents a valuable contribution by offering original insights tailored explicitly to the Libyan context. The information presented in this paper is relevant to project managers operating within the oil and gas industry. It also offers a novel approach to risk management in the Libyan oil and gas industry that can improve project efficiency and effectiveness.

Details

Journal of Engineering, Design and Technology , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1726-0531

Keywords

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