Organizational Risk Management and Performance from the Perspective of Fraud: A Comparative Study in Iraq, Iran, and Saudi Arabia
Abstract
:1. Introduction
2. Literature Review and Hypothesis Development
2.1. Firm Performance
2.2. Risk Management
2.3. Fraud
2.4. Hypothesis Development
Risk Management and Firm Performance
3. Empirical Methodology
3.1. Data Collection and Sample
- The companies’ fiscal years should not have changed during the study’s inquiry period;
- During the research period, the studied firms should continuously operate, and their stock should be actively traded;
- From 2012 through 2019, the enterprises should have furnished all needed financial information;
- The researched companies should be in the manufacturing industry in order to have the same reporting procedure and increase the comparability between included companies.
3.2. Empirical Model and Variables
3.2.1. Dependent Variable
3.2.2. Independent Variable
3.2.3. Control Variables
4. Findings
4.1. Descriptive Statistics
4.2. Inferential Statistics
4.2.1. Non-Stationarity Properties of Research Variables
4.2.2. The Results of Testing Research Hypotheses
Test Results of the First Hypothesis
The Second Hypothesis
Test Results of the Third Hypothesis
5. Discussion and Conclusions
Author Contributions
Funding
Data Availability Statement
Conflicts of Interest
References
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Panel A. Iran | ||||||
---|---|---|---|---|---|---|
Variable | Mean | Median | St.d | Max | Min | Obs |
SG | 0.259 | 0.219 | 0.335 | 0.987 | −0.311 | 1304 |
ROA | 0.127 | 0.104 | 0.122 | 0.626 | −0.160 | 1304 |
CR | 0.163 | 0.126 | 0.158 | 0.703 | −0.098 | 1304 |
GAS | 0.922 | 0.814 | 0.461 | 2.031 | 0.226 | 1304 |
ERM | −1.309 | −1.323 | 0.680 | −0.001 | −2.597 | 1304 |
ROE | 0.368 | 0.323 | 0.283 | 0.999 | −0.171 | 1304 |
LnAsset | 14.393 | 14.187 | 1.532 | 20.183 | 10.491 | 1304 |
LnIncome | 11.079 | 11.743 | 3.640 | 18.812 | 0.000 | 1304 |
BINDEP | 0.606 | 0.600 | 0.226 | 1.000 | 0.226 | 1304 |
CEOTenure | 3.766 | 3.000 | 3.290 | 17.000 | 1.000 | 1304 |
M | 1 | 1227 | ||||
0 | 77 | |||||
CEODual | 1 | 396 | ||||
0 | 908 | |||||
Panel B. KSA | ||||||
SG | −0.069 | −0.022 | 0.391 | 0.854 | −0.833 | 435 |
ROA | 0.040 | 0.005 | 0.075 | 0.374 | −0.191 | 435 |
CR | 0.455 | 0.313 | 0.403 | 0.351 | −0.005 | 435 |
GAS | 0.092 | 0.062 | 0.097 | 0.351 | −0.005 | 435 |
ERM | −1.037 | −1.027 | 0.764 | −0.532 | −1.758 | 435 |
ROE | 0.126 | 0.116 | 0.104 | 0.350 | −0.033 | 435 |
LnAsset | 21.651 | 21.503 | 1.578 | 25.498 | 16.830 | 435 |
LnIncome | 17.603 | 18.551 | 5.037 | 24.780 | 11.326 | 435 |
BINDEP | 0.703 | 0.750 | 0.074 | 0.833 | 0.500 | 435 |
CEOTenure | 2.710 | 2.000 | 0.959 | 4.000 | 1.000 | 435 |
M | 1 | 423 | ||||
0 | 17 | |||||
CEODual | 1 | 121 | ||||
0 | 319 | |||||
Panel C. Iraq | ||||||
SG | 0.329 | 0.059 | 1.015 | 3.778 | −0.708 | 280 |
ROA | −0.009 | 0.006 | 0.168 | 0.282 | −0.393 | 280 |
CR | −0.196 | 0.069 | 0.941 | 0.861 | −2.925 | 280 |
GAS | 0.326 | 0.226 | 0.302 | 1.112 | 0.018 | 280 |
ERM | −0.241 | −0.253 | 0.466 | −0.001 | −2.982 | 280 |
ROE | −0.034 | 0.001 | 0.122 | −0.430 | 0.134 | 280 |
LnAsset | 22.428 | 22.479 | 1.362 | 26.723 | 17.456 | 280 |
LnIncome | 12.192 | 17.916 | 9.541 | 24.770 | 9.325 | 280 |
BINDEP | 0.073 | 0.000 | 0.095 | 0.285 | 0.000 | 280 |
CEOTenure | 2.892 | 3.000 | 0.860 | 4.000 | 0.000 | 280 |
M | 1 | 245 | ||||
0 | 35 | |||||
CEODual | 1 | 167 |
Panel A. Iran | |
---|---|
Variables | t-Statistics |
SG | −26.514 *** |
ROA | −22.919 *** |
CR | −145.049 *** |
GAS | −31.809 *** |
ERM | −26.860 *** |
ROE | −109.229 *** |
LnAsset | −6.488 *** |
LnIncome | −14.302 *** |
BINDEP | −26.514 *** |
CEOTenure | −12.235 *** |
Panel B. KSA | |
SG | −17.415 *** |
ROA | −109.806 *** |
CR | −92.800 *** |
GAS | −17.331 *** |
ERM | −31.663 *** |
ROE | −32.220 *** |
LnAsset | −12.859 *** |
LnIncome | −16.093 *** |
BINDEP | −8.869 *** |
CEOTenure | −9.269 *** |
Panel C. Iraq | |
SG | −19.574 *** |
ROA | −14.036 *** |
CR | −6.589 *** |
GAS | −15.525 *** |
ERM | −12.803 *** |
ROE | −8.859 *** |
LnAsset | −13.090 *** |
LnIncome | −98.462 *** |
BINDEP | −8.869 *** |
CEOTenure | −5.168 *** |
Variable | SG | ROA | CR | GAS |
---|---|---|---|---|
ERM | 0.004 (0.015) | 0.002 * (0.001) | −0.000 (0.001) | −0.025 ** (0.012) |
ROE | 0.563 *** (0.045) | 0.125 *** (0.010) | 0.105 *** (0.005) | 0.354 *** (0.033) |
LnAsset | 0.109 *** (0.018) | 0.008 *** (0.003) | 0.016 *** (0.002) | −0.094 *** (0.014) |
LnIncome | 0.019 *** (0.003) | 0.014 *** (0.001) | 0.012 *** (0.000) | 0.012 *** (0.002) |
CEODual | 0.035 (0.026) | 0.000 (0.006) | 0.004 (0.004) | 0.032 (0.022) |
BINDEP | −0.180 * (0.105) | −0.024 (0.029) | −0.016 (0.013) | −0.195 ** (0.086) |
CEOTenure | −0.003 (0.003) | −0.001 *** (0.005) | −0.001 ** (0.000) | 0.002 (0.002) |
Adjusted R-squared | 0.214 | 0.859 | 0.919 | 0.797 |
F-statistics | 3.100 *** | 48.014 *** | 82.122 *** | 31.340 *** |
Durbin Watson | 1.975 | 1.691 | 1.565 | 1.661 |
F-Limmer | 1.334 *** | 6.655 *** | 45.993 *** | 29.385 *** |
Human test | 116.347 *** | 51.322 *** | 51.905 *** | 17.617 *** |
Variable | SG | ROA | CR | GAS |
---|---|---|---|---|
ERM | −0.223 *** (0.052) | −0.007 (0.005) | 0.039 * (0.018) | −0.005 (0.004) |
ROE | 0.186 (0.197) | 0.297 *** (0.024) | −0.167 (0.204) | 0.199 *** (0.032) |
LnAsset | 0.065 (0.045) | −0.035 *** (0.005) | 0.047 (0.029) | −0.018 *** (0.002) |
LnIncome | 0.004 (0.004) | 0.000 (0.000) | 0.018 *** (0.001) | 0.004 *** (0.000) |
CEODual | 0.012 (0.038) | 0.008 (0.006) | 0.013 (0.032) | 0.016 ** (0.005) |
BINDEP | 0.013 (0.255) | 0.014 (0.028) | 0.034 (0.090) | 0.019 (0.012) |
CEOTenure | −0.013 (0.018) | 0.000 (0.002) | 0.001 (0.009) | 0.001 (0.001) |
Adjusted R-squared | 0.257 | 0.826 | 0.714 | 0.933 |
F-statistics | 4.433 *** | 34.848 *** | 18.814 *** | 100.949 *** |
Durbin Watson | 2.316 | 1.657 | 1.591 | 1.675 |
F-Limmer | 0.914 | 24.187 *** | 16.357 *** | 30.059 *** |
Human test | - | 18.391 *** | 6.761 *** | 17.433 *** |
Variable | SG | ROA | CR | GAS |
---|---|---|---|---|
ERM | 0.118 (0.063) | −0.004 (0.003) | 0.173 (0.109) | 0.035 * (0.018) |
ROE | 2.311 *** (0.380) | 0.781 *** (0.043) | 4.230 *** (0.689) | 1.104 *** (0.145) |
LnAsset | −0.092 (0.056) | −0.001 (0.005) | 0.020 (0.090) | −0.129 ** (0.038) |
LnIncome | −0.000 (0.003) | 0.002 *** (0.000) | 0.033 *** (0.006) | 0.005 ** (0.001) |
CEODual | −0.058 (0.097) | −0.007 * (0.003) | 0.008 (0.121) | −0.021 (0.028) |
BINDEP | 0.081 (0.089) | 0.001 (0.004) | −0.050 (0.113) | −0.003 (0.037) |
CEOTenure | −0.018 (0.029) | 0.009 ** (0.003) | 0.083 (0.058) | 0.008 (0.013) |
Adjusted R-squared | 0.138 | 0.932 | 0.665 | 0.713 |
F-statistics | 2.092 *** | 94.691 *** | 14.534 *** | 17.911 *** |
Durbin Watson | 2.172 | 1.552 | 1.684 | 1.654 |
F-Limmer | 1.829 *** | 11.882 *** | 2.089 *** | 16.931 *** |
Human test | 6.340 | 15.889 *** | 13.935 *** | 17.114 *** |
Variable | SG | ROA | CR | GAS |
---|---|---|---|---|
ERM | 0.013 (0.014) | 0.011 *** (0.004) | 0.007 (0.005) | 0.022 (0.018) |
ROE | 0.229 *** (0.038) | 0.098 *** (0.011) | 0.032 ** (0.015) | 0.417 *** (0.049) |
LnAsset | −0.006 (0.006) | −0.017 *** (0.020) | −0.014 *** (0.002) | −0.050 (0.008) |
LnIncome | 0.012 *** (0.003) | 0.025 *** (0.000) | 0.034 *** (0.001) | 0.000 (0.004) |
CEODual | 0.012 (0.020) | −0.000 (0.006) | −0.019 ** (0.008) | 0.096 *** (0.027) |
BINDEP | −0.002 (0.042) | 0.016 (0.012) | 0.002 (0.016) | 0.005 (0.054) |
CEOTenure | −0.002 (0.002) | 0.000 (0.000) | 0.000 (0.001) | −0.004 (0.003) |
Adjusted R-squared | 0.197 | 0.522 | 0.383 | 0.197 |
F-statistics | 14.276 *** | 192.435 *** | 100.449 *** | 18.875 *** |
Durbin Watson | 1.834 | 1.685 | 1.769 | 1.536 |
Variable | SG | ROA | CR | GAS |
---|---|---|---|---|
ERM | 0.066 *** (0.024) | −0.003 (0.004) | −0.016 (0.023) | 0.005 (0.004) |
ROE | 0.276 (0.194) | 0.327 *** (0.032) | −0.383 ** (0.187) | 0.357 *** (0.034) |
LnAsset | 0.011 (0.011) | −0.014 *** (0.019) | −0.042 *** (0.011) | −0.028 *** (0.002) |
LnIncome | −0.001 (0.004) | 0.002 *** (0.000) | 0.031 *** (0.004) | 0.007 *** (0.000) |
CEODual | −0.011 (0.042) | 0.018 ** (0.007) | 0.013 (0.041) | −0.005 *** (0.007) |
BINDEP | −0.102 (0.251) | 0.096 ** (0.041) | 0.385 (0.242) | −0.004 (0.044) |
CEOTenure | 0.012 (0.019) | 0.003 (0.003) | 0.013 (0.018) | −0.004 (0.003) |
Adjusted R-squared | 0.211 | 0.317 | 0.140 | 0.511 |
F-statistics | 3.690 *** | 28.740 *** | 10.756 *** | 63.422 *** |
Durbin Watson | 2.116 | 1.538 | 1.964 | 1.736 |
Variable | SG | ROA | CR | GAS |
---|---|---|---|---|
ERM | −0.252 * (0.145) | 0.007 (0.013) | −0.139 (0.087) | −0.055 (0.043) |
ROE | 1.181 ** (0.590) | 0.856 *** (0.055) | 3.131 ** (0.352) | 0.189 (0.177) |
LnAsset | 0.167 *** (0.048) | −0.004 (0.004) | −0.063 *** (0.029) | −0.019 (0.014) |
LnIncome | 0.008 (0.008) | 0.004 *** (0.000) | 0.048 *** (0.005) | 0.007 *** (0.002) |
CEODual | −0.029 (0.155) | −0.019 (0.014) | −0.105 (0.093) | −0.111 ** (0.046) |
BINDEP | 0.591 (0.800) | −0.015 (0.075) | −0.205 (0.478) | 0.121 (0.241) |
CEOTenure | −0.107 (0.073) | 0.010 (0.006) | −0.055 (0.043) | 0.000 (0.022) |
Adjusted R-squared | 0.196 | 0.750 | 0.140 | 0.189 |
F-statistics | 4.728 *** | 105.612 *** | 10.756 *** | 4.430 *** |
Durbin Watson | 1.645 | 1.986 | 1.964 | 1.675 |
Variable | SG | ROA | CR | GAS |
---|---|---|---|---|
ERM | 0.054 (0.040) | 0.002 (0.010) | −0.021 (0.014) | 0.209 *** (0.075) |
ROE | 0.047 (0.107) | −0.032 (0.027) | −0.004 ** (0.039) | 0.232 (0.201) |
LnAsset | −0.027 (0.024) | 0.001 (0.006) | −0.001 *** (0.007) | −0.078 * (0.045) |
LnIncome | 0.025 *** (0.008) | 0.023 *** (0.002) | 0.018 *** (0.002) | −0.021 (0.016) |
CEODual | −0.012 (0.084) | −0.054 ** (0.021) | 0.061 ** (0.029) | −0.363 ** (0.157) |
BINDEP | 0.147 (0.196) | 0.040 (0.049) | 0.087 (0.058) | −0.003 (0.366) |
CEOTenure | −0.025 * (0.013) | −0.003 (0.003) | −0.003 (0.004) | 0.009 (0.025) |
Adjusted R-squared | 0.147 | 0.635 | 0.567 | 0.269 |
F-statistics | 2.871 ** | 19.911 *** | 11.120 *** | 2.201 ** |
Durbin Watson | 1.832 | 1.689 | 1.810 | 1.731 |
Variable | SG | ROA | CR | GAS |
---|---|---|---|---|
ERM | −0.071 (0.244) | −0.048 (0.028) | −0.287 (0.284) | 0.003 (0.033) |
ROE | 0.790 (1.412) | 0.427 ** (0.166) | −0.847 (1.643) | 0.578 ** (0.196) |
LnAsset | −0.075 (0.133) | −0.020 (0.016) | −0.058 (0.155) | −0.028 (0.018) |
LnIncome | −0.021 (0.022) | −0.003 (0.002) | −0.015 (0.026) | 0.003 (0.003) |
CEODual | 0.140 (0.331) | 0.023 (0.039) | 0.049 (0.385) | 0.049 (0.046) |
BINDEP | 3.859 (2.425) | 0.560 * (0.286) | −1.312 (2.823) | −0.365 (0.337) |
CEOTenure | 0.193 (0.138) | 0.011 (0.016) | 0.173 (0.160) | 0.014 (0.019) |
Adjusted R-squared | 0.141 | 0.380 | 0.149 | 0.566 |
F-statistics | 3.093 *** | 3.315 *** | 3.720 *** | 3.799 *** |
Durbin Watson | 1.889 | 1.513 | 1.511 | 1.550 |
Variable | SG | ROA | CR | GAS |
---|---|---|---|---|
ERM | −0.274 (0.327) | −0.006 (0.018) | −0.222 (0.163) | −0.198 ** (0.089) |
ROE | 3.789 (3.173) | 0.864 *** (0.180) | 1.124 (1.583) | −0.102 (0.870) |
LnAsset | −0.085 (0.211) | 0.016 (0.012) | 0.070 (0.105) | −0.069 (0.058) |
LnIncome | 0.052 ** (0.025) | 0.004 (0.001) | 0.021 * (0.012) | 0.008 (0.006) |
CEODual | 0.523 (0.544) | 0.000 (0.031) | 0.169 (0.271) | −0.031 (0.149) |
BINDEP | −4.662 (3.060) | −0.084 (0.174) | 0.815 (1.527) | −0.412 (0.839) |
CEOTenure | −0.238 (0.237) | −0.011 (0.013) | −0.092 (0.118) | −0.066 (0.065) |
Adjusted R-squared | 0.223 | 0.673 | 0.165 | 0.170 |
F-statistics | 3.683 *** | 11.029 *** | 3.963 *** | 3.001 ** |
Durbin Watson | 1.617 | 1.570 | 2.178 | 1.618 |
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Alkhyyoon, H.; Abbaszadeh, M.R.; Zadeh, F.N. Organizational Risk Management and Performance from the Perspective of Fraud: A Comparative Study in Iraq, Iran, and Saudi Arabia. J. Risk Financial Manag. 2023, 16, 205. https://doi.org/10.3390/jrfm16030205
Alkhyyoon H, Abbaszadeh MR, Zadeh FN. Organizational Risk Management and Performance from the Perspective of Fraud: A Comparative Study in Iraq, Iran, and Saudi Arabia. Journal of Risk and Financial Management. 2023; 16(3):205. https://doi.org/10.3390/jrfm16030205
Chicago/Turabian StyleAlkhyyoon, Hussein, Mohammad Reza Abbaszadeh, and Farzaneh Nassir Zadeh. 2023. "Organizational Risk Management and Performance from the Perspective of Fraud: A Comparative Study in Iraq, Iran, and Saudi Arabia" Journal of Risk and Financial Management 16, no. 3: 205. https://doi.org/10.3390/jrfm16030205