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The Impact of Enterprise Risk Management, Strategic Agility, and Quality of Internal Audit Function on Firm Performance

Author

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  • Ai Ping Teoh

    (Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia,)

  • Kaih Yeang Lee

    (Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia)

  • Rajendran Muthuveloo

    (Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia.)

Abstract

This paper examines the relationship of enterprise risk management (ERM) implementation to firm performance, the mediating role of strategic agility and moderating role of quality of internal audit function (QIAF) in this relationship among Malaysian public listed companies (PLCs). ERM implementation was conceptualized with the elements in COSO (2004) ERM integrated framework, and firm performance was measured by financial and non-financial indicators. Atotal of 137 responses were obtained through questionnaire from PLCs in main market of Bursa Malaysia. The empirical findings of the study suggest that ERM implementation has a significant relationship to firm performance and strategic agility significantly mediate the relationship. However, QIAF does not significantly moderate the relationship between ERM implementation and firm performance. Low response rate presents a challenge to generalize the content to all PLCs in Malaysia. Due to time and cost constraints this study did not acquire any secondary data and interviews which may provide further in-depth findings related to the research. In this study ERM framework as an integrative risk management has been recognized as the contributor to the firm performance of sample companies. PLCs, securities commission and institute of internal auditors Malaysia will benefit from the findings of this study

Suggested Citation

  • Ai Ping Teoh & Kaih Yeang Lee & Rajendran Muthuveloo, 2017. "The Impact of Enterprise Risk Management, Strategic Agility, and Quality of Internal Audit Function on Firm Performance," International Review of Management and Marketing, Econjournals, vol. 7(1), pages 222-229.
    • Handle: RePEc:eco:journ3:2017-01-30
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    References listed on IDEAS

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    Cited by:

    1. Lenka Syrová & Jindřich Špička, 2023. "Exploring the indirect links between enterprise risk management and the financial performance of SMEs," Risk Management, Palgrave Macmillan, vol. 25(1), pages 1-27, March.
    2. Ahammad, Mohammad Faisal & Basu, Shubhabrata & Munjal, Surender & Clegg, Jeremy & Shoham, Ofra Bazel, 2021. "Strategic agility, environmental uncertainties and international performance: The perspective of Indian firms," Journal of World Business, Elsevier, vol. 56(4).
    3. Nyamrunda, Frank Charles & Freeman, Susan, 2021. "Strategic agility, dynamic relational capability and trust among SMEs in transitional economies," Journal of World Business, Elsevier, vol. 56(3).
    4. Petra Lesníková & Andrea Janáková Sujová, 2023. "Agile Companies – Features And Benefits," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 17(1), pages 80-89.

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    More about this item

    Keywords

    Enterprise Risk Management; Strategic Agility; Internal Audit Function; Firm Performance; Malaysia;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M19 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Other

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