Journal of Risk and Financial Management

22 pages, 442 KiB

Open AccessArticle

A Review of AI and Its Impact on Management Accounting and Society

by David Kerr, Katherine Taken Smith, Lawrence Murphy Smith and Tian Xu

J. Risk Financial Manag. 2025, 18(6), 340; https://doi.org/10.3390/jrfm18060340 - 19 Jun 2025

Viewed by 786

Past and current advances in artificial intelligence (AI) have resulted in a significant impact on business and accounting. Over time, AI has slowly transformed from the 1950s to today, from rule-based systems, also known as expert systems, to the deep learning architectures and [...] Read more.

Past and current advances in artificial intelligence (AI) have resulted in a significant impact on business and accounting. Over time, AI has slowly transformed from the 1950s to today, from rule-based systems, also known as expert systems, to the deep learning architectures and sophisticated neural networks of modern generative AI. Early AI accounting applications of expert systems included a GAAP-based expert system to assess the appropriate accounting treatment for business combinations and an expert system to determine the proper type of audit report to issue. Recent accounting expert systems have been developed for document analysis, fraud detection, evaluating credit risk, and corporate default forecasting. The purpose of this study is to examine key events in the history of AI, current applications, and potential future effects pertaining to management accounting and society overall. In addition, the relationship of AI with economic and social factors will be evaluated. The study’s findings will be of interest to management accountants, businesspersons, academic researchers, and others who are concerned with artificial intelligence and its impact on management accounting and society overall. Full article

(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)

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29 pages, 1087 KiB

Open AccessSystematic Review

Does Sustainability Orientation Drive Financial Success in a Non-Ergodic World? A Systematic Literature Review

by Edgars Sedovs, Tatjana Volkova and Iveta Ludviga

J. Risk Financial Manag. 2025, 18(6), 339; https://doi.org/10.3390/jrfm18060339 - 19 Jun 2025

Viewed by 441

Abstract

In today’s environment of increased uncertainty, firms face new challenges in aligning sustainability orientation (SO) with financial performance (FP). In this non-ergodic world, past trends offer limited insight into the future due to economic instability, geopolitical conflicts, trade wars, environmental and social disasters, [...] Read more.

In today’s environment of increased uncertainty, firms face new challenges in aligning sustainability orientation (SO) with financial performance (FP). In this non-ergodic world, past trends offer limited insight into the future due to economic instability, geopolitical conflicts, trade wars, environmental and social disasters, sustainability policy and commitment reversals, etc. To investigate this, we conducted a systematic literature review and topic modelling with a latent Dirichlet allocation of 117 English peer-reviewed articles in management, business, economics, and finance related to SO and FP *. These articles, obtained from Scopus and Web of Science, were open-access and had reached the final publication stage. By integrating resource-based, institutional, and stakeholder theories, we aim to identify the current understanding of the SO concept and the mechanisms linking it to FP. Our findings show that sustainability-oriented firms are better equipped to achieve financial success in a non-ergodic world. However, outcomes vary widely based on context and duration, with existing literature revealing positive and negative relationships or no impact. Topic modelling identified 17 themes, such as stakeholder engagement, business performance, sustainability-oriented innovation and corporate sustainability. We propose five theoretical propositions and forward-looking research directions based on these findings. As a result, our study contributes to the existing academic literature by providing an integrated resource-based, institutional, and stakeholder theory view of the relationship between SO and FP for organisational resilience and outlining future research directions for managing this relationship in a non-ergodic world. Full article

(This article belongs to the Section Sustainability and Finance)

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27 pages, 356 KiB

Open AccessReview

A Comparative Analysis of the Belt and Road Initiative with Other Global and Regional Infrastructure Initiatives: Prospects and Challenges

by Euston Quah, Jun Rui Tan and Iuldashov Nursultan

J. Risk Financial Manag. 2025, 18(6), 338; https://doi.org/10.3390/jrfm18060338 - 19 Jun 2025

Viewed by 423

Abstract

The Belt and Road Initiative (BRI) is the first and currently the most expansive global infrastructure initiative, notably for its scale and emphasis on connectivity. In response, alternative initiatives such as the Partnership for Global Infrastructure and Investment (PGII) and Free and Open [...] Read more.

The Belt and Road Initiative (BRI) is the first and currently the most expansive global infrastructure initiative, notably for its scale and emphasis on connectivity. In response, alternative initiatives such as the Partnership for Global Infrastructure and Investment (PGII) and Free and Open Indo-Pacific Strategy (FOIP), including their components the Blue Dot Network (BDN) and Partnership for Quality Infrastructure (PQI), as well as Global Gateway (GG) and the Three Seas Initiative (3SI), have emerged to counterbalance the BRI’s influence and promote more transparent, sustainable, and rules-based infrastructure frameworks. This review investigates how global and regional infrastructure initiatives—namely PGII/BDN, GG, FOIP/PQI, and 3SI—compare with the BRI in terms of development objectives, implementation models, institutional structures, and implications for developing economies. Adopting an inductive approach, this review identifies key themes from the literature to evaluate these initiatives across seven dimensions: (1) infrastructure objectives, (2) the quality and transparency of investments, (3) investment policy orientation, (4) trade policy orientation, (5) inclusivity and regional integration, (6) coordination mechanisms, and (7) environmental sustainability. While PGII/BDN, GG, FOIP/PQI, and 3SI appear well-positioned to address some of BRI’s shortcomings, the evidence does not clearly favour one model over another in terms of achieving welfare-enhancing outcomes and bridging development gaps. Nonetheless, strategic competition and complementarities among the connectivity policies of multiple initiatives can ultimately contribute to more accountable, multidimensionally sustainable, and socially inclusive infrastructure development. We also illustrate how stated preference methods, i.e., willingness to pay (WTP) and willingness to accept (WTA), can be used to quantify the value of soft infrastructure, particularly public preferences for sustainable investment and norm diffusion, which are central to evaluating the social welfare gains from participating in these initiatives. Full article

(This article belongs to the Special Issue Globalization and Economic Integration)

26 pages, 1603 KiB

Open AccessArticle

Difficulties in the Application of Accounting and Management Control in Higher Education Institutions in Portugal

by Pedro Borges, Maria do Céu Alves and Rui Silva

J. Risk Financial Manag. 2025, 18(6), 337; https://doi.org/10.3390/jrfm18060337 - 19 Jun 2025

Viewed by 346

Abstract

Approximately two decades after the approval of POCP, and following an assessment of the need for an accounting system that meets the demands of proper planning, accountability, and financial control, the SNC-AP was introduced. This system, regulated by 27 Public Accounting Standards, has [...] Read more.

Approximately two decades after the approval of POCP, and following an assessment of the need for an accounting system that meets the demands of proper planning, accountability, and financial control, the SNC-AP was introduced. This system, regulated by 27 Public Accounting Standards, has faced challenges in its implementation. Therefore, it is relevant to analyze how managers of Portuguese higher education institutions (HEIs) perceive this issue. The objective of this research is to determine whether HEI managers use management control tools, which management control models are adopted, and the difficulties encountered in their implementation. To achieve this, a qualitative empirical study was conducted through semi-structured interviews with 12 administrators and financial directors from Portuguese higher education institutions (HEIs). The results show that management accounting is complex and challenging to implement. Portuguese HEIs are still in the early stages of adopting these tools, with progress limited to defining activities and cost centers. Conditions have not yet been established to calculate, for example, the cost per course, student, project, or service, as outlined in NCP27 of the SNC-AP. Full article

(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)

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24 pages, 519 KiB

Open AccessArticle

Measuring Inclusive Growth in Developing Countries: Composite Index Approach and Sectoral Transformation Analysis

by Tatevik Mkrtchyan, Ani Khachatryan and Svetlana Ratner

J. Risk Financial Manag. 2025, 18(6), 336; https://doi.org/10.3390/jrfm18060336 - 19 Jun 2025

Viewed by 381

Abstract

Inclusive growth is increasingly recognized as being critical to sustainable development, particularly in the context of rising income inequality and social polarization around the globe. Effective policy requires robust measurement, prompting the need to move beyond GDP and supplement traditional economic indicators. This [...] Read more.

Inclusive growth is increasingly recognized as being critical to sustainable development, particularly in the context of rising income inequality and social polarization around the globe. Effective policy requires robust measurement, prompting the need to move beyond GDP and supplement traditional economic indicators. This study proposes a novel inclusive growth index (IGI) for 73 developing countries. The index is constructed using factor analysis with principal component analysis (PCA) across four pillars: economy, living conditions, equality, and governance. Our results reveal significant heterogeneity among developing countries, largely driven by variations in economic development and governance. Further analysis using OLS regression explores the impact of sectoral transformation, demonstrating a statistically significant positive relationship between shifts from the agricultural to the service sector and the IGI. These findings provide valuable insights for policymakers seeking to create more opportunities and target interventions to achieve more inclusive growth in developing economies. Full article

(This article belongs to the Special Issue Innovative Approaches in Econometrics, Financial Market and Business Analytics)

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20 pages, 553 KiB

Open AccessArticle

Forecasting Systemic Risk in the European Banking Industry: A Machine Learning Approach

by Zeinab Srour, Jamil Hammoud and Mohamed Tarabay

J. Risk Financial Manag. 2025, 18(6), 335; https://doi.org/10.3390/jrfm18060335 - 19 Jun 2025

Viewed by 434

Abstract

The aim of this article is to forecast the systemic risk contribution and exposure measured by the delta conditional value at risk (ΔCoVaR) and the marginal expected shortfall (MES), respectively. We first estimate the ΔCoVaR and MES for banks in 16 European countries [...] Read more.

The aim of this article is to forecast the systemic risk contribution and exposure measured by the delta conditional value at risk (ΔCoVaR) and the marginal expected shortfall (MES), respectively. We first estimate the ΔCoVaR and MES for banks in 16 European countries for the 2002–2016 period. We then predict systemic risk measures using machine learning techniques, such as artificial neural network (ANN) and support vector machine (SVM), and we use AR-GARCH specification. Finally, we compare the methods’ forecasting values and the actual values. Our results show that two hidden layers of artificial neural networks perform efficiently in forecasting systemic risk. Full article

(This article belongs to the Special Issue Banking Practices, Climate Risk and Financial Stability)

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28 pages, 1585 KiB

Open AccessArticle

The Impact of Climate Change on Financial Stability in South Africa

by Siyabonga Mbotho and Sheunesu Zhou

J. Risk Financial Manag. 2025, 18(6), 334; https://doi.org/10.3390/jrfm18060334 - 18 Jun 2025

Viewed by 355

Abstract

This study investigates the dynamic relationships between climate change and financial stability in South Africa by employing a Bayesian vector autoregression model (BVAR). Using data from 1991 to 2022, we examine the impact of carbon emissions, adjusted savings, renewable energy consumption, lending interest [...] Read more.

This study investigates the dynamic relationships between climate change and financial stability in South Africa by employing a Bayesian vector autoregression model (BVAR). Using data from 1991 to 2022, we examine the impact of carbon emissions, adjusted savings, renewable energy consumption, lending interest rates, and unemployment on financial stability. Our findings indicate that carbon emissions, adjusted savings damaged by carbon dioxide emissions, renewable energy consumption, and unemployment significantly erode financial stability. Impulse response functions reveal that shocks to carbon emissions, lending interest rates, and unemployment have lasting effects on financial stability. Forecast error variance decomposition analysis shows that external factors, particularly carbon emissions and lending interest rates, increasingly drive uncertainty in forecasting financial stability over time. The study’s results support the Financial Instability Hypothesis and the Diamond–Dybvig model, highlighting the importance of considering climate-related risks in financial stability analysis. The findings have significant implications for policymakers and financial regulators seeking to promote financial stability and mitigate climate-related risks in South Africa. Full article

(This article belongs to the Section Financial Markets)

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27 pages, 804 KiB

Open AccessArticle

The Dynamics of Financial Innovation and Bank Performance: Evidence from the Tunisian Banking Sector Using a Mixed-Methods Approach

by Tarek Sadraoui

J. Risk Financial Manag. 2025, 18(6), 333; https://doi.org/10.3390/jrfm18060333 - 18 Jun 2025

Viewed by 391

Abstract

This study investigates the interactive link between bank performance and financial innovation in Tunisian banking using a mixed-methods research framework that combines econometric approaches and institutional factors. The empirical analysis uses a panel data of 11 commercial banks from the period of 2000–2024 [...] Read more.

This study investigates the interactive link between bank performance and financial innovation in Tunisian banking using a mixed-methods research framework that combines econometric approaches and institutional factors. The empirical analysis uses a panel data of 11 commercial banks from the period of 2000–2024 and employs an Autoregressive distributed lag (ARDL) model to estimate short- and long-run impacts of innovation on return on equity (ROE). A composite indicator of Fintech investment, digital service adoption, and innovation productivity characterizes financial innovation. Governance factors like the presence of risk management departments and executive compensation are taken into account. The results reveal a robust positive impact of financial innovation on bank performance in the long run, especially in more concentrated market settings. Risk management supports performance, while inefficient executive compensation is negatively associated with profitability. These findings are confirmed by robustness tests with HAC standard errors. This research contributes to the literature by situating financial innovation in the context of an emerging North African market and produces practitioner-relevant information for policymakers and bank executives interested in ensuring that performance results are consistent with innovation strategy. Full article

(This article belongs to the Section Business and Entrepreneurship)

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17 pages, 356 KiB

Open AccessArticle

Shock and Volatility Transmissions Across Global Commodity and Stock Markets Spillovers: Empirical Evidence from Africa

by Ichraf Ben Flah, Kaies Samet, Anis El Ammari and Chokri Terzi

J. Risk Financial Manag. 2025, 18(6), 332; https://doi.org/10.3390/jrfm18060332 - 18 Jun 2025

Viewed by 871

Abstract

This paper investigates the link between commodity price volatility and stock market indices in Nigeria, Ghana, and Côte d’Ivoire, focusing on commodities such as oil, cocoa, and gold over a daily period from 2 January 2020 to 31 December 2021. In order to [...] Read more.

This paper investigates the link between commodity price volatility and stock market indices in Nigeria, Ghana, and Côte d’Ivoire, focusing on commodities such as oil, cocoa, and gold over a daily period from 2 January 2020 to 31 December 2021. In order to conduct this study, the BEKK-GARCH process is applied to test the volatility transmission across commodity and stock markets, while focusing on the asymmetry in the conditional variances of these markets. The analysis reveals a 30% increase in volatility spillovers during the COVID-19 period, highlighting significant asymmetry in conditional variances between African stock markets and global commodity markets. Furthermore, the findings demonstrate that conditional variances in stock and commodity markets are asymmetrical. This study advances the literature on volatility transmission by providing novel evidence on asymmetric spillovers between African stock markets and global commodity prices, particularly during COVID-19. It offers insights into the unique role of emerging African markets in global financial interconnectedness. Full article

(This article belongs to the Section Financial Markets)

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33 pages, 491 KiB

Open AccessArticle

Unlocking BRICS Economies’ Potential: Infrastructure as the Gateway to Enhanced Capital Flows

by Sunita Sharma, Shalini Aggarwal, Meena Sharma, Abdallah AlKhawaja and Suzan Dsouza

J. Risk Financial Manag. 2025, 18(6), 331; https://doi.org/10.3390/jrfm18060331 - 17 Jun 2025

Viewed by 603

Abstract

This study investigates the impact of physical and financial infrastructure on the dynamics of net total capital flows in BRICS economies over the period 2010–2024. Using panel data and a fixed-effects regression model with robust standard errors, it analyzes how infrastructure quality, both [...] Read more.

This study investigates the impact of physical and financial infrastructure on the dynamics of net total capital flows in BRICS economies over the period 2010–2024. Using panel data and a fixed-effects regression model with robust standard errors, it analyzes how infrastructure quality, both physical (transport, energy, and telecommunications) and financial (banking systems, capital markets, and regulation), affects private capital inflows. The results show a statistically significant positive relationship, with physical infrastructure reducing business costs and financial infrastructure improving capital allocation and investor confidence. This paper contributes novel empirical evidence linking infrastructure systems with capital flow dynamics, providing key insights for policymakers aiming to enhance resilience and attract sustainable private investment. Full article

(This article belongs to the Section Economics and Finance)

20 pages, 439 KiB

Open AccessArticle

Digital Asset Adoption in Inheritance Planning: Evidence from Thailand

by Tanpat Kraiwanit, Pongsakorn Limna and Supakorn Suradinkura

J. Risk Financial Manag. 2025, 18(6), 330; https://doi.org/10.3390/jrfm18060330 - 17 Jun 2025

Viewed by 494

Abstract

This study investigates key factors influencing individuals’ intentions to incorporate digital assets into inheritance planning in Thailand. The research focuses on three primary determinants: demographic characteristics, knowledge of digital assets, and the perceived risks associated with their usage and transfer. Utilizing a quantitative [...] Read more.

This study investigates key factors influencing individuals’ intentions to incorporate digital assets into inheritance planning in Thailand. The research focuses on three primary determinants: demographic characteristics, knowledge of digital assets, and the perceived risks associated with their usage and transfer. Utilizing a quantitative research design, data were collected from 630 Thai respondents via a structured online questionnaire through convenience sampling. Binary logistic regression analysis was applied to identify statistically significant predictors. The results indicate that digital-asset knowledge, gender, age, income, saving behavior, and risk perception collectively account for a substantial variance in individuals’ intentions to use digital assets as part of their inheritance planning. Notably, knowledge and income positively influence adoption, suggesting that financial education and broader economic development may encourage increased usage. Conversely, factors such as age, gender, and perception of risks pose significant barriers, underscoring the need for targeted strategies to foster inclusivity. As digital assets transition from speculative tools to recognized financial instruments, their role in inheritance planning becomes increasingly relevant. This study contributes to a deeper understanding of this evolving financial landscape in the Thai context and offers insights applicable to other emerging markets undergoing similar digital transformations. Full article

(This article belongs to the Section Financial Technology and Innovation)

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23 pages, 2290 KiB

Open AccessArticle

Mapping Systemic Tail Risk in Crypto Markets: DeFi, Stablecoins, and Infrastructure Tokens

by Nader Naifar

J. Risk Financial Manag. 2025, 18(6), 329; https://doi.org/10.3390/jrfm18060329 - 16 Jun 2025

Viewed by 746

Abstract

This paper investigates systemic tail dependence within the crypto-asset ecosystem by examining interconnectedness across eight major tokens spanning Layer 1 cryptocurrencies, DeFi tokens, stablecoins, and infrastructure/governance assets. We employ a novel partial correlation-based network framework and quantile-specific connectedness measures to examine how co-movement [...] Read more.

This paper investigates systemic tail dependence within the crypto-asset ecosystem by examining interconnectedness across eight major tokens spanning Layer 1 cryptocurrencies, DeFi tokens, stablecoins, and infrastructure/governance assets. We employ a novel partial correlation-based network framework and quantile-specific connectedness measures to examine how co-movement patterns evolve under normal and extreme market conditions from September 2021 to March 2025. Unlike conventional correlation or variance decomposition approaches, our methodology isolates direct, tail-specific transmission channels while filtering out standard shocks. The results indicate strong asymmetries in dependence structures. Systemic risk intensifies during adverse tail events, particularly around episodes such as the Terra/Luna crash, the USDC depeg, and Bitcoin’s 2024 halving cycle. Our analysis shows that ETH, LINK, and UNI are key assets in spreading losses when the market falls. In contrast, the stablecoin DAI tends to absorb some of the stress, helping reduce risk during downturns. These results indicate critical contagion pathways and suggest that regulation targeting protocol-level transparency, liquidity provisioning, and interoperability standards may reduce amplification mechanisms without eliminating interdependence. Our findings contribute to the emerging literature on crypto-systemic risk and offer actionable insights for regulators, DeFi protocol architects, and institutional investors. In particular, we advocate for the incorporation of tail-sensitive network diagnostics into real-time monitoring frameworks to better manage asymmetric spillover risks in decentralized financial systems. Full article

(This article belongs to the Special Issue The Future of Money: Central Bank Digital Currencies, Cryptocurrencies and Stablecoins)

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23 pages, 1426 KiB

Open AccessArticle

Fintech and Sustainability: Charting a New Course for Jordanian Banking

by Mohammed Othman

J. Risk Financial Manag. 2025, 18(6), 328; https://doi.org/10.3390/jrfm18060328 - 16 Jun 2025

Cited by 1 | Viewed by 527

Abstract

This study explores the transformative role of financial technology (fintech) in advancing sustainability, financial inclusion, and customer engagement in Jordan’s banking sector. Utilizing a quantitative descriptive survey design, data were collected from 400 participants—comprising 300 bank customers and 100 banking professionals—through a structured [...] Read more.

This study explores the transformative role of financial technology (fintech) in advancing sustainability, financial inclusion, and customer engagement in Jordan’s banking sector. Utilizing a quantitative descriptive survey design, data were collected from 400 participants—comprising 300 bank customers and 100 banking professionals—through a structured bilingual questionnaire distributed via digital platforms. The study aims to evaluate how fintech innovations align with sustainable finance practices, extend banking access to underserved populations, and influence customer satisfaction. The results reveal strong evidence of fintech’s positive impact across all three domains. Regression analysis confirmed a statistically significant relationship between fintech innovation and the adoption of sustainable finance practices (β = 0.6498, p < 0.001), explaining 42.2% of the variance in sustainability outcomes. Similarly, fintech adoption was found to significantly improve financial inclusion among underserved populations (β = 0.6842, p < 0.001), accounting for 46.85% of the variance in access to services. One-way ANOVA analysis further showed that increased fintech integration significantly enhances customer engagement, with mean satisfaction scores rising progressively with higher fintech usage levels (F = 24.49, p < 0.001). The study underscores that fintech is a critical enabler of ethical banking transformation in Jordan, promoting ESG objectives, reducing financial access disparities, and strengthening customer loyalty. The findings confirm that fintech significantly contributes to sustainable, inclusive, and customer-centric banking practices. These insights support the notion that fintech adoption not only redefines banking operations but also charts a sustainable and socially responsible future for the Jordanian financial sector. Full article

(This article belongs to the Special Issue Banking Practices, Climate Risk and Financial Stability)

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28 pages, 637 KiB

Open AccessArticle

Do Syndicated Loan Borrowers Trade-Off Real Activities Manipulation with Accrual-Based Earnings Management?

by Dina El Mahdy

J. Risk Financial Manag. 2025, 18(6), 327; https://doi.org/10.3390/jrfm18060327 - 16 Jun 2025

Viewed by 306

Abstract

This study investigates how managers choose between alternative earnings management mechanisms among syndicated loan borrowers. Specifically, it examines the trade-off between accrual-based earnings management (AEM) and real activities manipulation (RAM) during the period leading up to syndicated loan origination. The study also explores [...] Read more.

This study investigates how managers choose between alternative earnings management mechanisms among syndicated loan borrowers. Specifically, it examines the trade-off between accrual-based earnings management (AEM) and real activities manipulation (RAM) during the period leading up to syndicated loan origination. The study also explores whether lender monitoring mechanisms influence subsequent earnings management behavior. The syndicated loan market, positioned between the private and public fixed income markets, offers a distinctive context for analyzing these strategic decisions. Using a propensity score-matched sample of syndicated and bilateral loans issued between 1989 and 2005, the study finds that firms obtaining syndicated loans are more likely to engage in earnings manipulation beforehand, relying more heavily on AEM than on RAM. Further analysis reveals that monitoring mechanisms—such as lender reputation, the number of syndicate members, loan size, and loan maturity—are significantly associated with future changes in AEM but show a weaker relationship with changes in RAM. Full article

(This article belongs to the Special Issue Earnings Management and Loan Contracts)

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17 pages, 446 KiB

Open AccessArticle

Identifying Base Erosion Through the Expenses Localness Indicators Model: A Methodology for Supporting Social Investment

by Georgia Parastatidou and Vassilios Chatzis

J. Risk Financial Manag. 2025, 18(6), 326; https://doi.org/10.3390/jrfm18060326 - 15 Jun 2025

Viewed by 343

Abstract

A company’s base, or physical location, is often a criterion or condition for inclusion in regional development programmes that offer investment incentives such as reduced taxes, subsidised loan rates, or funding for research and development projects. However, these programmes, aimed at strengthening communities [...] Read more.

A company’s base, or physical location, is often a criterion or condition for inclusion in regional development programmes that offer investment incentives such as reduced taxes, subsidised loan rates, or funding for research and development projects. However, these programmes, aimed at strengthening communities lagging behind in economic development, are often the target of malicious exploitation by companies that have a virtual headquarters in the region without actually contributing to local economies. This study proposes the use of the Expenses Localness Indicators (ELI) model as a reliable indicator of a company’s real contribution to a local economy. The ELI model can measure and highlight attempts to erode a company’s headquarters, and also assess a company’s integration into the local economy. By simulating a virtual economic environment and generating synthetic transaction data, the effectiveness of the ELI model in detecting false location claims and quantifying regional participation is evaluated. The results show that companies that prioritise local partnerships maintain higher locality scores, while those that partner with low locality entities weaken their local economic footprint, regardless of physical location. The ELI model provides a transparent and reliable tool that can be used both to grant regional incentives and to monitor their performance. Its integration into policy design can support more equitable, evidence-based approaches to regional economic development and social investment. Full article

(This article belongs to the Section Financial Markets)

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18 pages, 469 KiB

Open AccessArticle

Navigating Financial Risk in the Digital Age: The Mediating Role of Performance and Indebtedness

by Siham Slassi-Sennou and Mourad Es-salmani

J. Risk Financial Manag. 2025, 18(6), 325; https://doi.org/10.3390/jrfm18060325 - 12 Jun 2025

Viewed by 750

Abstract

In the context of an increasingly digital economy, firms are rapidly adopting technological innovations to bolster financial resilience and competitiveness. However, the quantitative impact of digital transformation on key financial outcomes—specifically performance, indebtedness, and risk—remains underexplored. This study investigates the extent and pathways [...] Read more.

In the context of an increasingly digital economy, firms are rapidly adopting technological innovations to bolster financial resilience and competitiveness. However, the quantitative impact of digital transformation on key financial outcomes—specifically performance, indebtedness, and risk—remains underexplored. This study investigates the extent and pathways through which digital transformation influences financial structures and stability. Employing Structural Equation Modeling (SEM) on firm-level survey data, the analysis reveals that digital transformation significantly enhances financial performance (β = 0.538, p < 0.01). Improved performance, in turn, leads to substantial reductions in firm indebtedness (β = −0.591, p < 0.01) and financial risk (β = −0.124, p = 0.021). While digital transformation does not directly affect indebtedness, it mitigates financial risk indirectly through two mediating variables: financial performance and firm indebtedness (mediated effects: β = −0.221 and β = −0.318, respectively; both p < 0.01). These findings underscore the financial value of digital initiatives, highlighting their role in enhancing performance and reducing financial vulnerabilities. The study offers strategic insights for managers and policymakers aiming to leverage digital transformation for financial optimization. Full article

(This article belongs to the Section Risk)

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27 pages, 2058 KiB

Open AccessSystematic Review

Sustainability Balanced Scorecard: Systematic Literature Review

by Amélia Silva, Isabel Maldonado, Manuel da Silva and Catarina Cepeda

J. Risk Financial Manag. 2025, 18(6), 324; https://doi.org/10.3390/jrfm18060324 - 12 Jun 2025

Viewed by 932

Abstract

Sustainability has become one of the main drivers of organizational performance. This study investigates the integration of sustainability with the balanced scorecard (BSC) as a framework for translating environmental management strategy into organizational performance. This review also seeks to map sustainability balanced scorecard [...] Read more.

Sustainability has become one of the main drivers of organizational performance. This study investigates the integration of sustainability with the balanced scorecard (BSC) as a framework for translating environmental management strategy into organizational performance. This review also seeks to map sustainability balanced scorecard (SBSC) research, clarifying its current role and identifying gaps and opportunities for future research. To achieve this, we sourced and reviewed 247 publications from the Web of Science index, corresponding to 129 scientific journals and 57 conference proceedings. Our analysis included content analysis and bibliometric analysis performed using the R packages Bibliometrix (version: 4.3.5), Biblioshiny, and CiteSpace (6.3.R1 Basic). The findings revealed that the SBSC enhances organizational capacity to align sustainability with strategic objectives, although significant implementation barriers remain, such as the selection of appropriate sustainability indicators and organizational resistance. This study contributes to advancing the theoretical and practical understanding of the SBSC while offering pathways for future research and application across sectors. Full article

(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)

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24 pages, 1928 KiB

Open AccessSystematic Review

AI and Financial Fraud Prevention: Mapping the Trends and Challenges Through a Bibliometric Lens

by Luiz Moura, Andre Barcaui and Renan Payer

J. Risk Financial Manag. 2025, 18(6), 323; https://doi.org/10.3390/jrfm18060323 - 12 Jun 2025

Viewed by 1827

Abstract

This study systematically reviews academic research on artificial intelligence (AI) in financial fraud prevention. Employing a bibliometric approach, we analyzed 137 peer-reviewed articles published between 2015 and 2025, sourced from Scopus, Web of Science, and ScienceDirect. Using Bibliometrix, we mapped the field’s intellectual [...] Read more.

This study systematically reviews academic research on artificial intelligence (AI) in financial fraud prevention. Employing a bibliometric approach, we analyzed 137 peer-reviewed articles published between 2015 and 2025, sourced from Scopus, Web of Science, and ScienceDirect. Using Bibliometrix, we mapped the field’s intellectual structure, collaboration patterns, and thematic clusters. Research interest has surged since 2019, led mainly by China and India, though the literature is mostly technical, with limited social science engagement. Three main themes emerged: AI-based fraud detection models, blockchain and fintech integration, and big data analytics. Despite growing output, international collaboration and focus on ethical, regulatory, and organizational issues remain limited. These insights provide a foundation for advancing both research and practical AI-driven fraud mitigation. Full article

(This article belongs to the Section Financial Technology and Innovation)

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22 pages, 1680 KiB

Open AccessArticle

Financially Savvy or Swayed by Biases? The Impact of Financial Literacy on Investment Decisions: A Study on Indian Retail Investors

by Abhilasha Agarwal, N. V. Muralidhar Rao and Manuel Carlos Nogueira

J. Risk Financial Manag. 2025, 18(6), 322; https://doi.org/10.3390/jrfm18060322 - 11 Jun 2025

Viewed by 1377

Abstract

Financial literacy plays a crucial role in shaping individual investment decisions by influencing susceptibility to behavioural biases such as heuristics, framing effects, cognitive illusions, and herding mentality. While most existing studies have examined financial literacy as a mediating factor, our study is among [...] Read more.

Financial literacy plays a crucial role in shaping individual investment decisions by influencing susceptibility to behavioural biases such as heuristics, framing effects, cognitive illusions, and herding mentality. While most existing studies have examined financial literacy as a mediating factor, our study is among the first in the literature to analyse the role of behavioural biases as mediating factors in the relationship between financial literacy and investment decisions. Specifically, we investigate key biases, including overconfidence, herding, disposition effect, self-attribution, anchoring, availability, representativeness, and familiarity. Using purposive sampling, we collected 482 responses through a structured Likert scale questionnaire. The dataset underwent rigorous validation and reliability tests to ensure robustness. We employed Python-based statistical analysis and used Pearson’s correlation and mediation analysis to explore the relationships between financial literacy, behavioural biases, and investment decisions. With the help of these methods, we were able to uncover relationships and causal pathways which further our understanding of the role of behavioural biases in determining the impact of financial literacy on investment behaviour. The findings illustrate a notable positive correlation between investment decisions and financial literacy, implying that people with higher financial literacy levels possess greater and more rational financial decision-making capabilities. Other analyses have revealed that biases have a moderating effect on this relationship, showing another path through which financial literacy impacts behaviour at the level of the investor. By placing behavioural biases as mediating constructs, this research broadens the scope of investor psychology and the body of knowledge in behavioural finance, highlighting the need to change the approach to how financial literacy programs aimed at investors are structured and implemented. Full article

(This article belongs to the Special Issue Financial Inclusion Strategies: Emerging Trends and Global Perspectives)

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19 pages, 443 KiB

Open AccessArticle

The Impact of Audit Committee Oversight on Investor Rationality, Price Expectations, Human Capital, and Research and Development Expense

by Rebecca Abraham, Venkata Mrudula Bhimavarapu and Hani El-Chaarani

J. Risk Financial Manag. 2025, 18(6), 321; https://doi.org/10.3390/jrfm18060321 - 11 Jun 2025

Viewed by 584

Abstract

Audit committees monitor the actions of managers as they pursue the goal of shareholder wealth maximization. The purpose of this study is to measure the impact of audit committee oversight on novel aspects of firm performance, including investor rationality, price expectations, human capital, [...] Read more.

Audit committees monitor the actions of managers as they pursue the goal of shareholder wealth maximization. The purpose of this study is to measure the impact of audit committee oversight on novel aspects of firm performance, including investor rationality, price expectations, human capital, and research and development expenses. It extends the literature to non-financial outcomes of audit committee oversight. The literature thus far has focused on the financial effects of audit committee oversight, such as return on assets, return on equity, risk, debt capacity, and firm value. Data was collected from 588 publicly traded firms in the U.S. pharmaceutical industry and energy industry from 2010 to 2022. Audit oversight was measured by the novel measurement of the frequency of the term ‘audit committee’ in annual reports and Form 10Ks from the SeekEdgar database. COMPUSTAT provided the remainder of the data. Panel Data fixed-effects models were used to analyze the data. Audit committee oversight significantly increased investor rationality, significantly reduced price expectations, and significantly increased human capital investment. An inverted U-shaped relationship occurred for audit committee oversight and research and development expenses, with audit oversight first increasing research and development expenses, then decreasing them. The study makes several contributions. First, the study uses a novel measure of audit oversight. Second, the study predicts the effect of audit committee oversight on unexplored non-financial measures, such as human capital and research and development expense. Third, the study offers a current test of the Miller model, as the last tests were performed over 20 years ago. Fourth, the study examines the impact of auditing on market measures that have not been explored in the literature, such as investor rationality and short selling. Full article

(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)

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15 pages, 1092 KiB

Open AccessReview

How Do Green Banking Practices Impact Banks’ Profitability? A Meta-Analysis

by Martin Kamau Muchiri, Maria Fekete-Farkas and Szilvia Kesmarki Erdei-Gally

J. Risk Financial Manag. 2025, 18(6), 320; https://doi.org/10.3390/jrfm18060320 - 11 Jun 2025

Viewed by 1001

Abstract

In light of the growing global emphasis on sustainability, understanding the nexus between green banking practices and banks’ profitability is essential and timely. The main aim of this study was to conduct a meta-analysis examining the link between green banking practices and banks’ [...] Read more.

In light of the growing global emphasis on sustainability, understanding the nexus between green banking practices and banks’ profitability is essential and timely. The main aim of this study was to conduct a meta-analysis examining the link between green banking practices and banks’ profitability. Based on 28 proxy relationships between green banking and green financing activities on banks profitability, a random-effects meta-analytic model was used to examine the corresponding effect sizes. An overall positive statistically insignificant effect size between green financing and green banking activities on banks profitability was established, implying that green banking activities do not consistently translate into financial benefits. However, this study established considerable heterogeneity of the results due to the application of different methodologies in diverse geographical contexts and varying green financing proxies. The study strongly recommends banks and policymakers adopt tailor-made, evidence-based green financing strategies to align their sustainability initiatives with market realities, regulatory frameworks, and institutional capacities. Such strategies promote the pursuit of both financial performance and environmental responsibility. Full article

(This article belongs to the Special Issue Banking Practices, Climate Risk and Financial Stability)

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20 pages, 1025 KiB

Open AccessArticle

Money Laundering in Global Economies: How Economic Openness and Governance Affect Money Laundering in the EU, G20, BRICS, and CIVETS

by Anas AlQudah, Mahmoud Hailat and Dana Setabouha

J. Risk Financial Manag. 2025, 18(6), 319; https://doi.org/10.3390/jrfm18060319 - 11 Jun 2025

Viewed by 937

Abstract

Purpose—This study examines the interaction of economic openness, governance, and money laundering. The paper’s main objective is to analyze how trade openness, foreign direct investment, and anti-corruption measures influence the risk of money laundering in specific economic blocs. Design/methodology/approach—This study analyzes these economic [...] Read more.

Purpose—This study examines the interaction of economic openness, governance, and money laundering. The paper’s main objective is to analyze how trade openness, foreign direct investment, and anti-corruption measures influence the risk of money laundering in specific economic blocs. Design/methodology/approach—This study analyzes these economic blocs (EU, G20, BRICS, and CIVETS) using annual data from the Basel Institute on Governance and World Bank statistics for 2012–2021. A panel-corrected standard errors (PCSE) estimator is employed to examine the relationships among the variables, accounting for cross-sectional dependence and ensuring robust parameter estimation. The corruption control index is a proxy for governance effectiveness, though it does not directly measure regulatory strength. Future research should incorporate more specific variables to evaluate the regulatory impact. Findings—This study reveals significant variations in money laundering risks by a country’s income category and economic bloc influenced by economic openness and governance structures. Economic growth and foreign direct investment (FDI) inflows exhibit contrasting effects on money-laundering risks; they tend to exacerbate risks in middle-income countries, while high-income nations demonstrated a lower risk of money laundering, likely due to more robust governance structures. Trade openness and anti-corruption measures generally reduced risks in wealthier countries, highlighting the importance of strong governance frameworks. These insights suggest that anti-money-laundering policies should be tailored to fit different regions’ unique economic and institutional contexts for enhanced effectiveness. Originality—This study employs a structured approach to analyzing a decade of panel data from key economic blocs, providing insights into the intricate relationships between governance, economic openness, and money laundering risks. Bridging the gap between theoretical research and practical, actionable strategies serves as a valuable resource for improving the effectiveness of anti-money-laundering (AML) measures on a global scale. Full article

(This article belongs to the Section Economics and Finance)

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17 pages, 879 KiB

Open AccessArticle

The Impact of Self-Sufficiency in Basic Raw Materials of Metallurgical Companies on Required Return and Capitalization: The Case of Russia

by Sergey Galevskiy, Tatyana Ponomarenko and Pavel Tsiglianu

J. Risk Financial Manag. 2025, 18(6), 318; https://doi.org/10.3390/jrfm18060318 - 10 Jun 2025

Viewed by 1069

Abstract

This article considers the impact of self-sufficiency in basic raw materials on the level of systematic risk, required return and capitalization on the example of Russian ferrous metallurgy companies. The methods applied include classical approaches to determining beta coefficient, required return and capitalization, [...] Read more.

This article considers the impact of self-sufficiency in basic raw materials on the level of systematic risk, required return and capitalization on the example of Russian ferrous metallurgy companies. The methods applied include classical approaches to determining beta coefficient, required return and capitalization, as well as correlation–regression analysis performed in the Python programming language (version 3.0, libraries: Numpy, Pandas, Matplotlib, Datetime, Statistics, Scipy, Bambi). The study revealed an inverse relationship between the self-sufficiency of ferrous metallurgy companies in iron ore and coking coal and their systematic risk. That was confirmed by the developed regression model. The presence of this dependence directly indicates the need to consider self-sufficiency when assessing a company’s required return and capitalization. The acquisition of the Tikhov coal mine by PJSC Magnitogorsk Iron and Steel Works (MMK) led to an increase in capitalization not only due to additional profit from the new asset, but also due to a decrease in the required return caused by the growth of the company’s self-sufficiency in coking coal. The proposed approach contributes to a more accurate assessment of the company’s capitalization and creates additional incentives for vertical integration transactions. Full article

(This article belongs to the Special Issue Corporate Finance: Financial Management of the Firm)

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26 pages, 1093 KiB

Open AccessArticle

Qualitatively Pre-Testing a Tailored Financial Literacy Measurement Instrument for Professional Athletes

by Jaco Moolman and Christina Cornelia Shuttleworth

J. Risk Financial Manag. 2025, 18(6), 317; https://doi.org/10.3390/jrfm18060317 - 10 Jun 2025

Viewed by 775

Abstract

The aim of this study was to qualitatively pre-test a research instrument to assess the financial literacy skills of professional athletes who compete in a team sport environment. Questions were developed based on a review of the current literature and an analysis of [...] Read more.

The aim of this study was to qualitatively pre-test a research instrument to assess the financial literacy skills of professional athletes who compete in a team sport environment. Questions were developed based on a review of the current literature and an analysis of qualitative data from twelve structured expert interviews, selected using actor–network theory and purposive sampling. The findings showed how qualitative data can be considered and enumerated to guide the development of 28 validated questions to assess financial literacy within a specific group. This study helps to fill a gap in the literature since there is a paucity of qualitatively mediated research that focuses on specific target groups in the field of financial literacy. This research instrument could be of value to professional athletes, sports club management, players’ associations, educators, researchers, sports agents, and advisors by providing them with a greater understanding of their clients’ financial literacy skills and financial needs. Full article

(This article belongs to the Special Issue Behavioral Finance and Financial Management)

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18 pages, 819 KiB

Open AccessArticle

Spillovers Among the Assets of the Fourth Industrial Revolution and the Role of Climate Uncertainty

by Mohammed Alhashim, Nadia Belkhir and Nader Naifar

J. Risk Financial Manag. 2025, 18(6), 316; https://doi.org/10.3390/jrfm18060316 - 9 Jun 2025

Viewed by 1074

Abstract

This research investigates the spillover effects between assets of the Fourth Industrial Revolution (4IR), focusing on the role of climate policy uncertainty in shaping these interactions. Using a time-varying parameter vector autoregressive (TVP-VAR) approach and a joint connectedness method, the analysis incorporates five [...] Read more.

This research investigates the spillover effects between assets of the Fourth Industrial Revolution (4IR), focusing on the role of climate policy uncertainty in shaping these interactions. Using a time-varying parameter vector autoregressive (TVP-VAR) approach and a joint connectedness method, the analysis incorporates five global indices representing key 4IR domains: the internet, cybersecurity, artificial intelligence and robotics, fintech, and blockchain. The findings reveal significant interdependencies among 4IR assets and evaluate the effect of risk factors, including climate policy uncertainty, as a critical driver of the determinants of returns. The results indicate the growing impact of climate-related risks on the structure of connectedness between 4IR assets, highlighting their implications for portfolio diversification and risk management. These insights are vital for investors and policymakers navigating the intersection of technological innovation and environmental challenges in a rapidly changing global economy. Full article

(This article belongs to the Special Issue Innovative Approaches to Managing Finance Risks in the FinTech Era)

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24 pages, 315 KiB

Open AccessArticle

Effect of ESG Financial Materiality on Financial Performance of Firms: Does ESG Transparency Matter?

by Adejayan Adeola Oluwakemi and Doorasamy Mishelle

J. Risk Financial Manag. 2025, 18(6), 315; https://doi.org/10.3390/jrfm18060315 - 9 Jun 2025

Viewed by 658

Abstract

Transparency in ESG financial materiality disclosure by corporations is now in doubt due to the inconsistent ESG framework that governs ESG disclosures, particularly in developing nations like South Africa. This is evident in the financial performance of banks and manufacturing firms as a [...] Read more.

Transparency in ESG financial materiality disclosure by corporations is now in doubt due to the inconsistent ESG framework that governs ESG disclosures, particularly in developing nations like South Africa. This is evident in the financial performance of banks and manufacturing firms as a result of the higher rate of susceptibility to ESG issues. Hence, this study empirically investigated the effect of ESG financial materiality disclosure on the financial performance of banks and manufacturing firms in South Africa from 2015 to 2024. Also, the moderating role of ESG transparency on the relationship between ESG financial materiality disclosure and financial performance was investigated. Descriptive analysis, a correlation matrix, and panel regression analysis were employed for analysis purposes. The financial metrics include ROA, ROE, and Tobin’s Q, while ESG financial materiality disclosure and the ESG disclosure score of the firms were the independent variable and moderating variable, respectively. The results show that ESG financial materiality exerts a significant adverse impact on ROA and ROE but an insignificant positive effect on Tobin’s Q in banks. For manufacturing firms, the impact is insignificant and negative on ROA, ROE, and Tobin’s Q. Also, the interactive effect of transparency insignificantly weakens the effect of ESG financial materiality disclosure on financial performance in both banks and manufacturing firms. This concludes that the transparency in ESG financial materiality disclosure is not sufficient to improve financial performance in both sectors but should be integrated in the core business objectives of firms. Also, it suggests that over-disclosure and greenwashing of ESG reports should be avoided. Full article

(This article belongs to the Special Issue Environmental, Social, and Governance (ESG), Corporate Social Responsibility (CSR), and Green Finance)

24 pages, 1418 KiB

Open AccessArticle

Oil Prices, Sustainability Initiatives, and Stock Market Dynamics: Insights from the MSCI UAE Index

by Hajer Zarrouk and Mohamed Khalil Ouafi

J. Risk Financial Manag. 2025, 18(6), 314; https://doi.org/10.3390/jrfm18060314 - 7 Jun 2025

Viewed by 1082

Abstract

This study examines the interplay between oil price volatility, sustainability-driven initiatives, and the MSCI UAE Index, highlighting the challenges that oil-dependent economies face in balancing financial stability with sustainability transitions. Using a dataset of 2707 daily observations from 2014 to 2024, we applied [...] Read more.

This study examines the interplay between oil price volatility, sustainability-driven initiatives, and the MSCI UAE Index, highlighting the challenges that oil-dependent economies face in balancing financial stability with sustainability transitions. Using a dataset of 2707 daily observations from 2014 to 2024, we applied linear regression, ARCH, GARCH, and TARCH models to analyze volatility dynamics across two key periods: the 2014–2016 oil price collapse and the 2019–2023 phase marked by the COVID-19 pandemic and increasing sustainability efforts. Our findings indicate that oil price fluctuations significantly impact the MSCI UAE Index, with GARCH models confirming persistent volatility and TARCH models revealing asymmetrical effects, where negative shocks intensify market fluctuations. While the initial sustainability policy announcements contributed to short-term volatility and investor uncertainty, they ultimately fostered market confidence and long-term stabilization. Unlike previous studies focusing solely on oil price volatility in emerging markets, this research integrates sustainability policy announcements into financial modeling, providing novel empirical insights into their impact on financial stability in oil-exporting economies. The findings suggest that stabilization funds, dynamic portfolio strategies, and transparent regulatory policies can mitigate oil price volatility risks and enhance market resilience during sustainability transitions, offering valuable insights for investors, policymakers, and financial institutions navigating the UAE’s evolving economic landscape. Full article

(This article belongs to the Section Financial Markets)

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28 pages, 1213 KiB

Open AccessReview

Digital by Default? A Critical Review of Age-Driven Inequalities in Payment Innovation

by Ida Claudia Panetta, Elaheh Anjomrouz, Paola Paiardini and Sabrina Leo

J. Risk Financial Manag. 2025, 18(6), 313; https://doi.org/10.3390/jrfm18060313 - 7 Jun 2025

Viewed by 1594

Abstract

This paper offers a systematic literature review of age-related disparities in the adoption of digital payment systems, a phenomenon that is becoming increasingly relevant as financial transactions become predominantly digital. Using the SPAR-4-SLR protocol, 66 scholarly contributions published between 2014 and 2024 are [...] Read more.

This paper offers a systematic literature review of age-related disparities in the adoption of digital payment systems, a phenomenon that is becoming increasingly relevant as financial transactions become predominantly digital. Using the SPAR-4-SLR protocol, 66 scholarly contributions published between 2014 and 2024 are examined and categorised into four thematic clusters: demographic determinants, behavioural drivers, structural barriers linked to the grey digital divide, and emerging insights from neurofinance. The review highlights a multifactorial set of barriers that limit older adults’ engagement with digital payments, including usability challenges, cognitive and physical limitations, digital skill gaps, and perceived security risks. These obstacles are further amplified by structural inequalities such as socio-economic status, geographic location, and infrastructural constraints. While digital payments are often presented as tools of inclusion, the findings underscore the risk of exclusion for ageing populations without tailored design and policy interventions. The review also identifies areas for further research, particularly at the intersection of ageing, cognitive function, and human–technology interaction, proposing a research agenda that supports more inclusive and age-responsive financial innovation. Full article

(This article belongs to the Special Issue Fintech, Business, and Development)

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19 pages, 320 KiB

Open AccessArticle

CEO Personal Characteristics and Investment-Cash Flow Sensitivity: An Analysis of Indian Independent (Non-Business-Group-Affiliated) Firms and Business Group-Affiliated Firms

by Gaurav Gupta

J. Risk Financial Manag. 2025, 18(6), 312; https://doi.org/10.3390/jrfm18060312 - 6 Jun 2025

Viewed by 981

Abstract

This study investigates the relationship between the CEO characteristics and investment–cash flow sensitivity (ICFS) of Indian manufacturing firms. By using the GMM technique, this study finds that CEO characteristics reduce ICFS. Further, this study examines the moderating role of business [...] Read more.

This study investigates the relationship between the CEO characteristics and investment–cash flow sensitivity (ICFS) of Indian manufacturing firms. By using the GMM technique, this study finds that CEO characteristics reduce ICFS. Further, this study examines the moderating role of business group-affiliated firms, independent firms (non-business group-affiliated firms), and firm size on the relationship between CEO characteristics and ICFS. The results reveal that group affiliation moderates the effectiveness of CEO characteristics in reducing ICFS. In addition to this, independent firms rely more heavily on the individual capabilities of CEOs to overcome financial constraints and mitigate ICFS, whereas group firms benefit from structural advantages that diminish the relative impact of CEO characteristics on ICFS. Additionally, this study finds that firm size also moderates the relationship between CEO characteristics and ICFS. The results reveal that CEO characteristics significantly reduce ICFS, with a more pronounced effect in small-sized independent firms compared to their larger counterparts. However, in group-affiliated firms, CEO characteristics have a minimal effect on ICFS, and this impact remains consistent across small and large group firms. These findings offer valuable insights for firms, lending institutions, and investors, emphasizing the role of CEO characteristics in shaping financial decision making, especially in independent and smaller firms. Full article

(This article belongs to the Section Business and Entrepreneurship)

18 pages, 425 KiB

Open AccessArticle

Relationships Between Corporate Control Environment and Stakeholders That Mediate Pressure on Independent Auditors in France

by Giemegerman Carhuapomachacon, Joshua Onome Imoniana, Cristiane Benetti, Vilma Geni Slomski and Valmor Slomski

J. Risk Financial Manag. 2025, 18(6), 311; https://doi.org/10.3390/jrfm18060311 - 5 Jun 2025

Cited by 1 | Viewed by 678

Abstract

The purpose of this research is to examine how relationships between corporate control environments and stakeholders mediate the different dimensions of pressure on auditor independence. In France, two (joint) auditors are required by law for listed companies. In this context, we analyze the [...] Read more.

The purpose of this research is to examine how relationships between corporate control environments and stakeholders mediate the different dimensions of pressure on auditor independence. In France, two (joint) auditors are required by law for listed companies. In this context, we analyze the experiences of higher-echelon professionals of audit firms, controllers, and managers who could elucidate the essence of pressure on auditor independence in their lived environment. An interpretative approach and empirical analysis were adopted for this study to expand on the literature and proffer an answer to the following research question: How does the relationship between a control environment and a stakeholder mediate the pressures on auditor independence? Interviews involved seven participants, mainly higher-echelon professionals of Big Four firms, as well as two members of auditee organizations, and a member of an audit committee. In addition, the narratives from the documents gathered from the EU audit legislation implementation database constitute our data corpus. Thematic coding was used to organize the results. The findings reveal that control environment best practices and down-to-earth corporate governance policies, participated in by both auditors and audited organizations, cushion the pressures on auditors. This, in turn, presents a positive and significant impact on auditor independence. Overall, the dimensions that mediate the pressures on auditors are as follows: the consciousness of pressure in itself; the reputation and experience of the audit firm; and the interactions between the auditors and corporate governance. Other factors include the cordiality of the relationship between the auditor and corporate management and the resulting healthy end of the negotiation between auditors and auditees. This study contributes to the theory and practical discussion of the relationships between the corporate control environment, corporate governance, auditing, and pressure on auditor independence. Full article

(This article belongs to the Section Business and Entrepreneurship)

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J. Risk Financial Manag., Volume 18, Issue 6 (June 2025) – 55 articles

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