To read this content please select one of the options below:

Risk Management and Internal Control: A Study of Management Accounting Practice

Advances in Management Accounting

ISBN: 978-1-78756-440-4, eISBN: 978-1-78756-439-8

Publication date: 13 August 2018

Abstract

Purpose – This article examines management accounting practice in relation to the two aspects of Enterprise Risk Management (ERM): risk management and internal controls.

Methodology/Approach – We conducted a survey of experienced management accountants to find out about the risk management and internal control aspects of their current ERM practices, and their perceived effectiveness in performing various ERM roles, within the context of the ERM culture and the level of information systems support for ERM in their organizations.

Findings – In terms of the risk management aspects of ERM, the management accountants in the survey contribute highly to managing risks of a financial or compliance/legal nature and tend to focus mostly on risks with potentially higher impact and higher likelihood of occurring. In terms of the internal control aspects of ERM, they play a highly important role in ERM activities related to prevention and internal risk treatment. Their organizations have an ERM culture that is perceived as open to challenging discussions about risk and have implemented IS support for management accounting in areas such as information security and standardized information architecture. Overall, the effectiveness of their contributions to ERM is perceived to be high in the areas of compliance and finance-related risk.

Originality/Value – We develop a framework and offer empirical evidence about the ERM contributions of management accountants. We propose and use two original scales: one to classify ERM activities, and the other to assess ERM culture.

Keywords

Acknowledgements

Acknowledgments

The authors wish to thank the members of the Institute of Management Accountants who participated in the survey, as well as participants at the Third Advances in Management Accounting World Conference on Management Accounting Research, for their helpful comments.

Citation

Bento, R.F., Mertins, L. and White, L.F. (2018), "Risk Management and Internal Control: A Study of Management Accounting Practice", Malina, M.A. (Ed.) Advances in Management Accounting (Advances in Management Accounting, Vol. 30), Emerald Publishing Limited, Leeds, pp. 1-25. https://doi.org/10.1108/S1474-787120180000030002

Publisher

:

Emerald Publishing Limited

Copyright © 2018 Emerald Publishing Limited