Perceptions about effective risk management. The crucial role of internal audit and management. Evidence from Greece
-
DOIhttp://dx.doi.org/10.21511/imfi.14(4).2017.01
-
Article InfoVolume 14 2017, Issue #4, pp. 1-11
- Cited by
- 1230 Views
-
659 Downloads
This work is licensed under a
Creative Commons Attribution-NonCommercial 4.0 International License
In the aftermath of the financial crisis, many companies have implemented extensive risk management procedures. Additionally, internal audit has increasingly attracted the attention of managers as it constitutes the core of modern corporate governance. However, regarding Greek companies, there is a lack of empirical research on factors that affect risk management. Therefore, the purpose of the present paper is to analyze specific factors associated with effective risk management. Primary data were collected using questionnaires distributed to employees in companies that are listed on the Athens Exchange. Multiple regression analysis was conducted in order to examine the relationship between effective risk management, risk based internal audit, internal auditors’ involvement in risk management and top management support. Our findings demonstrate that the above factors contribute positively to effective risk management.
- Keywords
-
JEL Classification (Paper profile tab)M40, M41, M42
-
References34
-
Tables4
-
Figures0
-
- Table 1. Demographics of respondents
- Table 2. Descriptive statistics regarding dependent and independents variables
- Table 3. Correlation matrix
- Table 4. Regression analysis
-
- Allegrini, M., & D’Onza, G. (2003). Internal Auditing and Risk Assessment in Large Italian Companies: an Empirical Survey. International Journal of Auditing, 7(3), 191-208.
- Aziz, N. (2012). Managing corporate risk and achieving internal control through statutory compliance. Journal of Financial Crime, 20(1), 25-38.
- Bekiaris, M., Efthymiou, T., & Koutoupis, A. (2013). Economic crisis impact on governance & internal audit: the case of Greece. Corporate Ownership & Control, 11(1), 55-64.
- Beumer, H. (2006). A risk oriented approach. Internal auditor, 2, 72-76.
- Bozek, S., & Emerling, I. (2016). Protecting the organization against risk and the role of financial audit on the example of the internal audit. OECONOMIA, 7(3), 485- 499.
- Carataș, M. A., & Spatariu, E. C. (2013). Risk management and compliance as main topics within nowadays’ Romanian internal auditing. Ovidius University Annals, Economic Sciences Series, 13(1), 1141-1145.
- Castanheira, N., Rodrigues, L., & Craig, R. (2010). Factors associated with the adoption of risk based internal auditing. Managerial Auditing Journal, 25(1), 79-98.
- Cohen, J., Krishnamoorthy, G., & Wright, A. (2017). Enterprise risk management and the financial reporting process: The experiences of audit committee members, CFOs, and external auditors. Contemporary Accounting Research, 34(4), 1178-1209.
- COSO (1992). Internal Control Integrated Framework. The Committee of Sponsoring Organizations of the Treadway Commission.
- Drogalas G., Arampatzis K., & Anagnostopoulou, E. (2016). The relationship between Corporate governance, internal audit and audit committee: Empirical evidence from Greece. Corporate Ownership and Control, 14(1), 569-577.
- Drogalas, G., Karagiorgos, T., & Arampatzis, K. (2015). Factors associated with internal audit effectiveness: Evidence from Greece. Journal of Accounting and Taxation, 7(7), 113-122.
- El-Sayed Ebaid, Ι. (2011). Internal audit function: an exploratory study from Egyptian listed firms. International Journal of Law and Management, 53(2), 108-128.
- Fernandez-Laviada, Α. (2007). Internal audit function role in operational risk management. Journal of Financial Regulation and Compliance, 15(2), 143-155.
- Fornell, C., & Larcker, D. (1981). Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Marketing Research, 18(1), 39-50.
- Hoyt, R. E., & Liebenberg, A. P. (2011). The value of enterprise risk management. The Journal of Risk and Insurance, 78(4), 795- 822.
- Institute of Internal Auditors (1999). A Vision for the Future: Professional Practices Framework for Internal Auditing. Altamonte Springs FL: The Institute of Internal Auditors Research Foundation.
- Institute of Internal Auditors (2012). International Standards for the professional practice of internal auditing. Altamonte Springs FL: The Institute of Internal Auditors Research Foundation.
- Karagiorgos, T., Drogalas, G., Pazarskis, M., & Christodoulou, P. (Eds). (2007). Retrieved from Mibes 2007. Larissa, Greece.
- KPMG (2002). Corporate governance in Europe: survey 2001/2002. Montvale NJ: KPMG.
- Krause, Τ. Α., & Tse, Y. (2016). Risk management and firm value: recent theory and evidence. International Journal of Accounting and Information Management, 24(1), 56-81.
- McNamee, D. (1992). Resolving Problems in Ethics and Management. Managerial Auditing Journal, 7(2), 3-11.
- Moloi, T. (2016). A cross sectoral comparison of risk management practices in selected South African organizations. Problems and Perspectives in Management, 14(3-1).
- Nunnally, J. C. (1978). Psychometric Theory, New York: McGraw-Hill.
- Pokrovac, I., Tusek, B., & Oluic, A. (Eds.) (2010). Proceedings from: 5th International Conference: An Enterprise Odysses, Zagreb.
- Quon, T., Zeghal, D., & Maigot, M. (2012). Enterprise risk management and business performance during the financial and economic crises. Problems and Perspectives in Management, 10(3), 95-103.
- Rijamampianina, R. (2016). A qualitative analysis of the internal audit function in the banking sector. Banks and Bank Systems, 11(4), 161-168.
- Sanchez, H., Benoit, R., Bourgault, M., & Pellerin, R. (2009). Risk management applied to projects, programs, and portfolios. International Journal of Managing Projects in Business, 2(1), 14-35.
- Sarens, G., & Beelde, I. (2006). Internal auditors’ perception about their role in risk management: A comparison between US and Belgian companies. Managerial Auditing Journal, 21(1), 63-80.
- Shin, I., & Park, S. (2017). Integration of enterprise risk management and management control system: based on a case study. Investment Management and Financial Innovations, 14(1), 19-26.
- Soh, D., & Martinov-Bennie, N. (2011). The internal audit function: Perceptions of internal audit roles, effectiveness and evaluation. Managerial Auditing Journal, 26(7), 605-622.
- Spira, L., & Page, M. (2003). Risk management: The reinvention of internal control and the changing role of internal audit. Accounting, Auditing & Accountability Journal, 16(4), 640-661.
- Stewart, J., & Subramaniam, N. (2010). Internal audit independence and objectivity: emerging research opportunities. Managerial Auditing Journal, 25(4), 328-360.
- Wang, Y., & Li, M. (2011). The Role of Internal Audit in Engineering Project Risk Management. Procedia Engineering, 24, 689-694.
- Zwaan, L., Stewart, J., & Subramaniam, N. (2011). Internal audit involvement in enterprise risk management. Managerial Auditing Journal, 26(7), 586-604.