Quality of financial reporting and the practice of enterprise risk management: Evidence from listed United States industrial companies
-
Author(s)Ruba BsoulLink to ORCID Index: https://orcid.org/0000-0002-4896-5392
,
Amer AlhammouriLink to ORCID Index: https://orcid.org/0009-0001-7886-324X
,
Hussein AlrabbaLink to ORCID Index: https://orcid.org/0000-0003-3172-9569
-
DOIhttp://dx.doi.org/10.21511/imfi.22(2).2025.35
-
Article InfoVolume 22 2025, Issue #2, pp. 450-460
- 16 Views
-
3 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This study aims to empirically investigate the impact of Enterprise Risk Management (ERM) practices on the quality of financial reporting (QFR) among U.S. industrial firms. It focuses on key ERM practice indicators such as board-level risk oversight, cash flow volatility, and value-at-risk (VaR). A static panel data approach was employed using data from 18 industrial firms registered on the New York Stock Exchange, covering the period from 2014 to 2022. The finding revealed that ERM significantly enhances the quality of financial reporting. Particularly, the board of risk management committees and VaR have a positive and significant influence on the quality of financial reporting. However, volatility in cash flows has an unfavorable and significant influence, thereby reducing the reliability of financial information disclosed by U.S industrial companies. The study’s empirical evidence can deepen prospective research by stimulating in-depth examination into the implementation of ERM, which enriches transparency and alleviates the risk related to financial reporting. It is recommended that regulatory bodies of the United States should rigorously follow the protocols of a corporate setting, COSO context, and all other legislation regarding risk management, thus preventing the dissemination of misleading accounting information and enhancing the reliability and credibility of the financial statements.
- Keywords
-
JEL Classification (Paper profile tab)G32, M41
-
References33
-
Tables6
-
Figures0
-
- Table 1. Descriptive statistics
- Table 2. Correlation matrix
- Table 3. Heteroscedasticity tests
- Table 4. Hausman test
- Table 5. Breusch-Pagan LM test
- Table 6. Regression results
-
- Adedayo, E. O., Sylvester, E., & Amiolemen, O. O. (2019). Does Enterprise Risk Management Impact Accounting Quality? Evidence from the Nigerian Financial Institutions. Investment Management & Financial Innovations, 16(4), 16-27.
- Alzeban, A. (2020). The Impact of the Audit Committee, CEO, and External Auditor Quality on the Quality of Financial Reporting. Corporate Governance: The International Journal of Business in Society, 20(2), 263-279.
- Baloyi, T., & Ozumba, A. (2020). Strategic Risk Management Among Small Enterprises in the Construction Industry. In MATEC Web of Conferences (Vol. 312, p. 02013). EDP Sciences.
- Breusch, T. S., & Pagan, A. R. (1980). The Lagrange Multiplier Test and Its Applications to Model Specification in Econometrics. The Review of Economic Studies, 47(1), 239-253.
- Cook, R. D., & Weisberg, S. (1983). Diagnostics for Heteroscedasticity in Regression. Biometrika, 70(1), 1-10.
- Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2004). Enterprise Risk Management—Integrated Framework.
- Dechow, P. M., & Dichev, I. D. (2002). The Quality of Accruals and Earnings: The Role of Accrual Estimation Errors. The accounting review, 77(s-1), 35-59.
- Donaldson, L., & Davis, J. H. (1991). Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns. Australian Journal of Management, 16(1), 49-64.
- Donatella, P., & Tagesson, T. (2021). CFO Characteristics and Opportunistic Accounting Choice in Public Sector Organizations. Journal of Management and Governance, 25, 509-534.
- Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman.
- Foroozian, H., & Gaskari, R. (2016). Investigation the Effect of Cash Flow Volatility and Financial Leverage on Earnings Management in the Context of Listed Companies in Tehran Stock Exchange (Iran). International Journal of Humanities and Cultural Studies, Special Issue, 2216-2224.
- Gao, S., Hsu, H. T., & Liu, F. C. (2025). Enterprise Risk Management, Financial Reporting and Firm Operations. Risks, 13(3), 48.
- Haruna, D., Kwambo, L. M., & Hassan, S. U. (2018). Board Characteristics and Earnings Quality of Listed Conglomerate Firms in Nigeria. Scholedge International Journal of Business Policy & Governance, 5(3).
- Huang, P., Guo, J., Ma, T., & Zhang, Y. (2015). Does the Value of Cash Holdings Deteriorate or Improve with Material Weaknesses in Internal Control Over Financial Reporting? Journal of Banking & Finance, 54, 30-45.
- Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure. Journal of Financial Economics, 3(4), 305-360.
- Klein, A. (2002). Audit Committee, Board of Director Characteristics, and Earnings Management. Journal of Accounting and Economics, 33(3), 375-400.
- Kim, J. H., Yoon, S. S., & Woodruff, G. (2012). On the Models and Estimation of Discretionary Accruals.
- Kuester, K., Mittnik, S., & Paolella, M. S. (2006). Value-at-Risk Prediction: A Comparison of Alternative Strategies. Journal of Financial Econometrics, 4(1), 53-89.
- Lisdiono, P., Said, J., Yusoff, H., Hermawan, A. A., & Manan, D. B. A. (2022). Risk Management Practices and Enterprise Resilience – The Mediating Role of Alliance Management Capabilities. Journal of Advances in Humanities Research, 1(2), 77-9.
- Meier, R. L. (2000). Integrating Enterprise-Wide Risk Management Concepts and Industrial Technology Curricula. Journal of Industrial Technology, 16(4), 1.
- Mustafa, F. M., & Al-Nimer, M. (2023). The Association between Enterprise Risk Management and Corporate Governance Quality: The Mediating Role of Internal Audit Performance. Journal of Advanced Research in Law and Economics, 9(4).
- Olayinka, E., Emoarehi, E., Jonah, A., & Ame, J. (2017). Enterprise Risk Management and Financial Performance: Evidence from Emerging Market. International Journal of Management, Accounting & Economics, 4(9).
- Pagach, D., & Warr, R. (2010). The Effects of Enterprise Risks Management on Firm Performance.
- Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. New York: Harper & Row.
- Pérignon, C., & Smith, D. R. (2010). The Level and Quality of Value-at-Risk Disclosure by Commercial Banks. Journal of Banking & Finance, 34(2), 362-377.
- Sawalqa, A., Ahmad, F., & Qtish, A. (2021). Internal Audit Function Quality and Audit Committees’ Practices: Survey Evidence from Jordan. Business and Economic Research, 11(2), 20-43.
- Song, G., & Kemp, S. T. (2013). Does the Existence of an Enterprise Risk Management (ERM) Program Influence the Existence of Material Weaknesses in Internal Control Over Financial Reporting? Pace University.
- Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355-374.
- Wei, Y. (2018). Earnings Management, Cashflow Volatility and Corporate Value (Master’s Thesis). University of Amsterdam.
- White, H. (1980). A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity. Econometrica: Journal of the Econometric Society, 817-838.
- Xu, J., & Li, J. (2022). The Interrelationship Between Intellectual Capital and Firm Performance: Evidence from China’s Manufacturing Sector. Journal of Intellectual Capital, 23(2), 313-341.
- Yamai, Y., & Yoshiba, T. (2002). Comparative Analyses of Expected Shortfall and Value-at-Risk: Their Estimation Error, Decomposition, and Optimization. Monetary and Economic Studies, 20(1), 87-121.
- Zakharzhevska, A. (2022). Formation of Strategic Guidelines for Risk Management in Telecommunications Enterprises. Economy Management Business, 40(3-4).
-
Academic resilience, emotional intelligence, and academic performance among undergraduate students
Uzoma Ononye ,
Mercy Ogbeta ,
Francis Ndudi ,
Dudutari Bereprebofa ,
Ikechuckwu Maduemezia
doi: http://dx.doi.org/10.21511/kpm.06(1).2022.01
Knowledge and Performance Management Volume 6, 2022 Issue #1 pp. 1-10 Views: 4085 Downloads: 1156 TO CITE АНОТАЦІЯAcademic resilience and emotional intelligence are considered important personal resources for furthering students’ academic performance. However, many educational organizations seem to trivialize the performance implications of these constructs in teachings and curriculum. Consequently, it can decrease not just their academic performance but also their employability, as they lack the generic competencies to adapt and survive in a stressful context. Even so, empirical evidence on integrating academic resilience, emotional intelligence, and academic performance remains unexplored in the Nigerian university context. Therefore, the study aimed to investigate the linkages between academic resilience, emotional intelligence, and academic performance in Nigeria. The partial least square (PLS) modeling method was utilized for testing the stated hypotheses with data collected from 179 final year undergraduate students in the regular B.Sc. Business Administration and B.Sc. Marketing program at Delta State University, Nigeria. From the PLS results, the study reported that academic resilience was positively related to emotional intelligence (β = 0.125, p = 0.007), academic resilience (β = 0.231, p = 0.000) and emotional intelligence (β = 0.260, p = 0.000) were positively related to academic performance, and emotional resilience mediated the positive relationship between academic resilience and academic performance (β = 0.057, p = 0.005). While academic resilience predicted academic performance, it also predicted emotional intelligence, which affected academic performance significantly and positively.
-
Investigating the impact of workplace bullying on employees’ morale, performance and turnover intentions in five-star Egyptian hotel operations
In today’s competitive business environment, human resources are one of the most critical assets particularly for service-focused organizations. Consequently, employees’ morale has become invaluable for maintaining outstanding organizational performance and retaining employees. One of the most important factors which may affect employees’ satisfaction is workplace bullying from employers and colleagues at large. It is considered a negative and unethical issue which may degrade, humiliate and create a risk to a healthy working environment. Therefore, the main objective of this research is to investigate the extent to which workplace bullying may affect the organizational outcomes of a sample of five-star hotels in Egypt. Two questionnaires were distributed among the subjects of the sample; bell desk staff, kitchen stewards and head departments. The results of this research confirmed that there is a correlation between workplace bullying, employees’ morale and turnover intentions but, showed no correlation between workplace bullying and employees’ work performance.
-
Corporate governance and financial performance: an empirical analysis of selected multinational firms in Nigeria
Gideon Tayo Akinleye , Odunayo Olarewaju 
,
Bamikole Samson Fajuyagbe
doi: http://dx.doi.org/10.21511/ppm.17(1).2019.02
Problems and Perspectives in Management Volume 17, 2019 Issue #1 pp. 11-18 Views: 3834 Downloads: 648 TO CITE АНОТАЦІЯThis study focused on corporate governance and performance of selected Nigerian multinational firms from 2012 to 2016. Specifically, the study focused on the effect of board size, activism and committee activism on return on asset and firm growth rate. Secondary data collected from four multinational firms were analyzed via static panel estimation techniques. While board size and board activism exerted significant negative impact on return on asset, committee activism exerted insignificant impact. The results of the study further showed that board size and board activism exert insignificant negative impact on firm’s growth rate, while committee activism insignificantly spurs firm’s growth rate. Decisively, discoveries from this study reflect that corporate governance has significant negative impact on return on asset, but has insignificant influence on the growth rate of Nigerian multinational firms. Based on these findings, the authors recommended that corporate governance dynamics in firms world over should be reconsidered, such that it gives credence to more than just numbers of persons or meetings held, but the main reasons and deliberations in such meetings. It was also recommended that excessive increase in magnitude or frequency of meetings held by board of directors cum committee should be avoided.
