The influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector

The purpose of this study is to examine the contribution made by the tone at the top management level and internal audit quality on the effectiveness of risk management practices (RMPs) in the financial services sector. This study is cross-sectional and correlational, and it uses firm-level data tha...

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Autores principales:	Frank Kabuye, Nicholas Bugambiro, Irene Akugizibwe, Sharon Nuwasiima, Sharon Naigaga
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2019
Materias:	financial services firms tone at the top management level internal audit quality risk management practices Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/3ad73340408349b7b818b886cd3d741c
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spelling	oai:doaj.org-article:3ad73340408349b7b818b886cd3d741c2021-12-02T18:31:21ZThe influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector2331-197510.1080/23311975.2019.1704609https://doaj.org/article/3ad73340408349b7b818b886cd3d741c2019-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2019.1704609https://doaj.org/toc/2331-1975The purpose of this study is to examine the contribution made by the tone at the top management level and internal audit quality on the effectiveness of risk management practices (RMPs) in the financial services sector. This study is cross-sectional and correlational, and it uses firm-level data that were collected by means of a questionnaire survey from a sample of 62 financial services firms in Uganda. Results suggest that the tone at the top management level and internal audit quality are both significant predictors of effective RMPs. However, the predictive potential of tone at the top management level towards effective RMPs reduces when internal audit quality is present. These results support the idea that in terms of agency theory, top management should oversee and review the organization’s risks as a way of spearheading effective RMPs. Similarly, internal auditors should sufficiently and appropriately review and coordinate risk management efforts in the organization, since high-quality internal audits lead to effective RMPs. Top managers of financial services firms should encourage periodic reviews of the appropriateness and effectiveness of risk management systems and controls. At the same time, regulators should ensure that top managers of financial services firms have adequate risk management expertise, with no conflict of interest and apply mechanisms that detect significant risks in time. The study contributes to the strategic risk management position by showing that the tone at the top management level and internal audit quality sets pace for an organization culture towards effective RMPs.Frank KabuyeNicholas BugambiroIrene AkugizibweSharon NuwasiimaSharon NaigagaTaylor & Francis Grouparticlefinancial services firmstone at the top management levelinternal audit qualityrisk management practicesBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 6, Iss 1 (2019)
institution	DOAJ
collection	DOAJ
language	EN
topic	financial services firms tone at the top management level internal audit quality risk management practices Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	financial services firms tone at the top management level internal audit quality risk management practices Business HF5001-6182 Management. Industrial management HD28-70 Frank Kabuye Nicholas Bugambiro Irene Akugizibwe Sharon Nuwasiima Sharon Naigaga The influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector
description	The purpose of this study is to examine the contribution made by the tone at the top management level and internal audit quality on the effectiveness of risk management practices (RMPs) in the financial services sector. This study is cross-sectional and correlational, and it uses firm-level data that were collected by means of a questionnaire survey from a sample of 62 financial services firms in Uganda. Results suggest that the tone at the top management level and internal audit quality are both significant predictors of effective RMPs. However, the predictive potential of tone at the top management level towards effective RMPs reduces when internal audit quality is present. These results support the idea that in terms of agency theory, top management should oversee and review the organization’s risks as a way of spearheading effective RMPs. Similarly, internal auditors should sufficiently and appropriately review and coordinate risk management efforts in the organization, since high-quality internal audits lead to effective RMPs. Top managers of financial services firms should encourage periodic reviews of the appropriateness and effectiveness of risk management systems and controls. At the same time, regulators should ensure that top managers of financial services firms have adequate risk management expertise, with no conflict of interest and apply mechanisms that detect significant risks in time. The study contributes to the strategic risk management position by showing that the tone at the top management level and internal audit quality sets pace for an organization culture towards effective RMPs.
format	article
author	Frank Kabuye Nicholas Bugambiro Irene Akugizibwe Sharon Nuwasiima Sharon Naigaga
author_facet	Frank Kabuye Nicholas Bugambiro Irene Akugizibwe Sharon Nuwasiima Sharon Naigaga
author_sort	Frank Kabuye
title	The influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector
title_short	The influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector
title_full	The influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector
title_fullStr	The influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector
title_full_unstemmed	The influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector
title_sort	influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector
publisher	Taylor & Francis Group
publishDate	2019
url	https://doaj.org/article/3ad73340408349b7b818b886cd3d741c
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The influence of tone at the top management level and internal audit quality on the effectiveness of risk management practices in the financial services sector

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