Journal of Primeasia
Integrative Disciplinary Research | Online ISSN 3064-9870 | Print ISSN 3069-4353
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Journal of Primeasia

Volume 1 Number 3 2020

Article Contents

RESEARCH ARTICLE   (Open Access)
Contents Vol 1 (3)

Establishment Corporate Reportage Quality with Initiative Risk Management in the United States

Farzana Zannat1*, Tama Rani Kundu2

+ Author Affiliations

Journal of Primeasia 1 (3) 1-7 https://doi.org/10.25163/primeasia.1110400

Submitted: 31 December 2019 Revised: 05 March 2020  Published: 10 March 2020 

Abstract

Background: Financial reporting quality serves as the essential foundation which enables corporations to maintain openness and provide dependable information and fulfill their duty to stakeholders. The United States needs reliable disclosure systems because financial systems have grown more complex and regulatory frameworks have become more stringent. The strategic framework Enterprise Risk Management (ERM) helps organizations identify and assess risks which affect financial reporting quality so they can create mitigation plans.

Methods: The research study examined 150 publicly traded American companies through their financial data which became available during 2020. The evaluation of ERM adoption and reporting quality occurred through analysis of restatement frequency and audit adjustments and internal control effectiveness and disclosure transparency.

Results: Organizations that maintained complete ERM systems achieved better reporting quality. The implementation of ERM brought down restatement occurrences to 13% from 28% while also boosting internal control effectiveness to 4.5 out of 5 and making disclosure processes more open. The analysis revealed a direct correlation between the two variables since ERM explained 41% of the variance in reporting quality according to regression analysis and showed a positive relationship with r = 0.62. The research showed that regulated businesses achieved better ERM results than unregulated sectors.

Conclusion: ERM brings improvement to financial reporting quality through its ability to decrease errors and boost transparency and gain stakeholder trust. ERM functions as a strategic tool which goes beyond compliance to establish sustainable corporate governance through accountability and reliability.

Keywords: Enterprise Risk Management, Financial Reporting Quality, Corporate Governance, Risk Mitigation

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