Abstract:
Enterprise risk management represents a process of assessing exposure to risks in an institution. It is a systematic mechanism and a comprehensive tool for predicting events, including unexpected events, and their impacts. This paper is a conceptual study. It aims at designing a model for testing the mediation effect of information technology (IT) quality on the relationship between the enterprise risk management (henceforth, ERM) practice and the financial performance of financial institutions in Iraq. Based on reviewing the literature on ERM, it is found that ERM (leadership roles, risk culture and compliance) has a positive and important effect on the financial performance of financial institution in Iraq. In addition, this paper shows that the IT quality is a good medium for increasing the interaction between practices of ERM and financial performance positively. It provides a practical and theoretical contribution to practices of ERM in listed companies in Iraq. It also has major implications for professional practitioners, regulators and academics in Iraq. Finally, this paper contributes to building relevant knowledge in the field of leadership role, risk culture, compliance and IT quality.
Machine summary:
Enterprise Risk Management and Performance of Financial Institutions in Iraq: The Mediating Effect of Information Technology Quality Ibrahim Ali Kurdi Assistant Prof.
It aims at designing a model for testing the mediation effect of information technology (IT) quality on the relationship between the enterprise risk management (henceforth, ERM) practice and the financial performance of financial institutions in Iraq.
Based on reviewing the literature on ERM, it is found that ERM (leadership roles, risk culture and compliance) has a positive and important effect on the financial performance of financial institution in Iraq.
Keywords: Enterprise Risk Management (ERM); IT quality; Leadership role; Risk culture; Compliance; Financial performance.
Most studies on risk management in financial institutions have found that risk is a regular practice of the modern bank (Mahmoud & Ahmed, 2014; Othman, 2016; Shafiq & Nasr, 2010; Tarawneh & Shafi’i 2018).
Accordingly, this study aims at determining whether the risk culture among elements in ERM is associated with the financial institutions performance in Iraq.
In short, leadership can be said to have a fundamental role in implementing commitment, accountability and senior management ownership of ERM practices that will ultimately improve the financial performance of organization.
The previous sections review studies conducted on corporate risk management and the financial institutions performance in terms of leadership roles, risk culture and compliance with the organization's rules and regulations.
Enterprise Risk Management and Performance of Financial Institutions in Iraq: The Mediating Effect of Information Technology Quality.