A comparative study of enterprise risk management on the financial performance of banks, investment and insurance companies: Approaches based on the COSO standard and performance data

Document Type : Original Article

Authors
Gholam Abbas Taghian 1
seyedeh mahboobeh jafari 2
mohsen hamidian 2
1 Department of Accounting, Kish International Branch, Islamic Azad University, Kish Island, Iran
2 Associate Professor, Department of Accounting, Faculty of Economics and Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran
10.30495/jik.2024.77750.4560
Abstract
The aim of this research is a comparative study of enterprise risk management on the financial performance of banks, investment, and insurance companies in the period from 2014 to 2022. The statistical population in the qualitative measurement of risk management is 183 financial industry managers and in the quantitative measurement of risk management, the financial data of banks, investment, and insurance companies listed in the Tehran Stock Exchange, which is based on the systematic elimination process to 71 banks and the firms are limited. Two approaches based on the COSO standard (qualitative) and performance data (quantitative) have been used to measure enterprise risk management. The results suggested that enterprise risk management based on both qualitative and quantitative approaches has a direct and significant effect on all three firm performance criteria (adjusted return, adjusted capital, and adjusted value) based on the industry median. In addition, when the measure of financial performance is adjusted return, the explanatory power (R2) of enterprise risk management based on qualitative model is more than the quantitative model, however in the other two measures of financial performance (i.e. capital and adjusted value), the explanatory power of enterprise risk management R2 of quantitative model is more than a qualitative model.
Keywords
Enterprise risk management
COSO standard
Financial institutions
performance
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