The effect of Enterprise Risk Management factors on Financial Reporting Quality with the interactive role of corporate governance

Abstract

In recent years, companies have faced a series of bankruptcies that have raised concerns about the error in the enterprise risk management process.The quality of financial reporting and its impact on risk management is a topic that has recently been favored by researchers.By reviewing the financial data of 156 firms listed in stock exchange for the period of 11 years (2006 to 2016), the effect of enterprise risk management factors on the quality of financial reporting with the interactive role of corporate governance has been investigated.The results showed that the Sigma risk and firm size have a positive effect on financial transparency and a negative effect on the quality of accruals. Arbitrage and Opinion divergence risk do not affect transparency.Corporate governance has a positive effect on both the interaction between Sigma risk and financial transparency, as well as the interaction between firm size and financial information transparency.Also, corporate governance has a negative effect on the interaction between Sigma risk and the quality of accruals and a positive effect on the interaction between the firm size and the quality of accruals.

Keywords

• financial reporting quality
• corporate governance index
• quality of accruals
• enterprise risk management