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Management accounting systems, enterprise risk management and organizational performance in financial institutions

Author

Listed:
  • Siti Zaleha Abdul Rasid
  • Che Ruhana Isa
  • Wan Khairuzzaman Wan Ismail

Abstract

Purpose - – The purpose of this paper is to examine the linkages between management accounting systems (MAS), enterprise risk management (ERM) and organizational performance by examining MAS information characteristics that match ERM implementation and joint effects of MAS and ERM on organizational performance. Design/methodology/approach - – The research method involved administering a questionnaire to 106 financial institutions (FIs) in Malaysia. The respondents were chief financial officers or staff members holding the most senior positions in the finance department of the institutions. Findings - – The significant findings on the association between ERM and MAS show that implementation of ERM requires the use of sophisticated MAS information. ERM and MAS complement each other as both are integral to decision making, planning and control in an organization. The finding also substantiates the important role of ERM in enhancing non-financial performance. Research limitations/implications - – This study covered only MAS as part of sub-control systems in an organization. Future studies could investigate the link between a more comprehensive management accounting and control system and ERM. Furthermore, this study used perceptual measures of MAS, ERM and organizational performance. Practical implications - – The regulating body should promote best management practices of sophisticated MAS and ERM among FIs as these practices will create competitive advantage as well as help those institutions comply with regulations. Originality/value - – This study has contributed to the body of knowledge on the linkages between MAS, risk management system and organizational performance.

Suggested Citation

  • Siti Zaleha Abdul Rasid & Che Ruhana Isa & Wan Khairuzzaman Wan Ismail, 2014. "Management accounting systems, enterprise risk management and organizational performance in financial institutions," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 22(2), pages 128-144, July.
    • Handle: RePEc:eme:arapps:v:22:y:2014:i:2:p:128-144
    DOI: 10.1108/ARA-03-2013-0022
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    Citations

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    Cited by:

    1. Cristiana Cattaneo & Gaia Bassani, 2019. "Enterprise Risk Management e Managemen Accounting Systems in una Banca di Credito Cooperativo," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2019(1 suppl.), pages 13-33.
    2. Songling Yang & Muhammad Ishtiaq & Muhammad Anwar, 2018. "Enterprise Risk Management Practices and Firm Performance, the Mediating Role of Competitive Advantage and the Moderating Role of Financial Literacy," JRFM, MDPI, vol. 11(3), pages 1-17, June.
    3. Munther Al-Nimer & Sinan S. Abbadi & Ahmad Al-Omush & Habib Ahmad, 2021. "Risk Management Practices and Firm Performance with a Mediating Role of Business Model Innovation. Observations from Jordan," JRFM, MDPI, vol. 14(3), pages 1-20, March.
    4. Muhammad Nabeel & Basel Ali & Allam Hamdan, 2019. "Real-Time Feedback on Consumer s Behavior: Literature Review," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 489-493.
    5. Akira Nishimura, 2016. "Foreign Exchange Risk and Profit Improvement in the Comprehensive Profit Opportunity and Lost Opportunity Control Model," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(4), pages 1-1, March.

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