The Impact Of Enterprise Risk Management, Strategic Agility And Quality Of Internal Audit Function On Firm Performance
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Date
2014
Authors
Lee, Kaih Yeang
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
Enterprise risk management or famously known as ERM is an integrated, enterprise-wide approach in assessing events that possibly to impact a firm’s ability to sustain its performance and hinder from achieving its strategic objectives. Due to the complexity of today environment, many firm has shifted from traditional risk management model to enterprise risk management model. At the same time, strategic agility play an important role as it allowed the firm to adapt to the changes quickly and maintain its competitiveness in the business environment. The role of internal audit function is increasing over the years especially with the recommendation from MCCG 2012 for the board to establish an internal audit function in the company. This study examines the relationship of ERM implementation to firm performance in public listed companies of Malaysia and mediating and moderating effects of strategic agility and quality of internal audit function in this relationship. The ERM implementation was conceptualized with the elements in COSO (2004) ERM Integrated Framework, and firm performance was measured by financial and non-financial indicators. Total of 137 responses obtained through questionnaire from PLCs in main market of Bursa Malaysia for data analysis and found ERM implementation has a significant relationship to firm performance and strategic agility significantly mediate the relationship. However, quality of internal audit function found does not significantly moderate the relationship between ERM implementation and firm performance.
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Keywords
The impact of enterprise risk management , internal audit function on firm performance