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The Effectiveness of Enterprise Risk Management and Internal Audit Function on Quality of Financial Reporting in Universities

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  • Wadesango N
  • Mhaka C

Abstract

This study examined the impact of enterprise risk management (ERM) and internal audit function (IAF) on the financial reporting quality (FRQ) of state universities in Zimbabwe. Utilizing a dataset of 250 respondents from across nine (9) state universities, the researchers examined the effectiveness of ERM and the IAF on the quality of financial reporting in state universities. The researchers employed the contingency theory and studied each university separately to report on items that are specific to each and then also establish a commonality in the definition of parameters to be used in setting up the benchmark against which future performance may be measured. The findings were that there is a strong and significant relationship between ERM and the FRQ and also that there is a positive relationship between the internal audit function and FRQ. Quality internal audit results improved corporate governance systems. The results also underscore the significance and need for central government to establish and monitor a system of good ERM processes that minimize corporate governance breaches and enhance integrity and independence in financial reporting in state universities.

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  • Wadesango N & Mhaka C, 2017. "The Effectiveness of Enterprise Risk Management and Internal Audit Function on Quality of Financial Reporting in Universities," Journal of Economics and Behavioral Studies, AMH International, vol. 9(4), pages 230-241.
    • Handle: RePEc:rnd:arjebs:v:9:y:2017:i:4:p:230-241
    DOI: 10.22610/jebs.v9i4(J).1836
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    References listed on IDEAS

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    1. Ganesh Krishnamoorthy & Arnie Wright & Jeffrey Cohen, 2002. "Audit Committee Effectiveness and Financial Reporting Quality: Implications for Auditor Independence," Australian Accounting Review, CPA Australia, vol. 12(28), pages 3-13, November.
    2. Armstrong, Christopher S. & Guay, Wayne R. & Weber, Joseph P., 2010. "The role of information and financial reporting in corporate governance and debt contracting," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 179-234, December.
    3. David F. Larcker & Scott A. Richardson, 2004. "Fees Paid to Audit Firms, Accrual Choices, and Corporate Governance," Journal of Accounting Research, Wiley Blackwell, vol. 42(3), pages 625-658, June.
    4. van der Laan Smith, Joyce & Adhikari, Ajay & Tondkar, Rasoul H., 2005. "Exploring differences in social disclosures internationally: A stakeholder perspective," Journal of Accounting and Public Policy, Elsevier, vol. 24(2), pages 123-151.
    5. Robert E. Hoyt & Andre P. Liebenberg, 2011. "The Value of Enterprise Risk Management," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 78(4), pages 795-822, December.
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    Cited by:

    1. Chidochashe Joanna M & Wadesango Newman & Malatji Stephen Khashane & Sitsha & L., 2021. "The Extent to which Public Private Partnerships Enhances Good Performance of an Entity," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 16-24.
    2. Rumbidzai & P. Mutare & Wadesango Newman & Malatji Stephen Khashane, 2021. "The Effectiveness of Tax Systems on Artisanal Miners and Small-Scale Miners," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 32-40.
    3. Newman - Wadesango & Gwangwadza D.C. & Charity Mhaka & Ongayi Wadesango, 2018. "Labour Force Reduction’s Influence on Financial Performance of Manufacturing Companies: A Case Study of Playtime Manufacturers (2011 – 2016)," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 48-72, OCTOBER.

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