Edyanus Herman Halim

Department of Management, Faculty of Economics, Universitas Riau

Indonesia

edyanus1963@gmail.com

Corporate governance practices and financial performance: The mediating effect of risk management committee at manufacturing firms

Gita Mustika

Department of Accounting, Faculty of Economics, Universitas Riau

Indonesia

gitamustika20@yahoo.co.id

Ria Nelly Sari

Department of Accounting, Faculty of Economics, Universitas Riau

Indonesia

ria.nellysari@lecturer.unri.ac.id

Rita Anugerah

Department of Accounting, Faculty of Economics, Universitas Riau

Indonesia

Rita.anugerah@lecturer.unri.ac.id

Zuraidah Mohd-Sanusi

Accounting Research Institute, Universiti Teknologi MARA

Malaysia

zuraidahms@salam.uitm.edu.my

Abstract. This study attempts to examine the effect of the Risk Management Committee on firm performance, and the intervening effect of the Risk Management Committee on the relationship between Corporate Governance, Firm Size, Financial Reporting Risk, and Firm Performance. Using the purposive sampling method, 299 firms were selected as the sample. This study used secondary data obtained from the companies’ annual reports, and the data was then analyze using SPSS, version 20.0. The results of this study indicate that the entire research hypothesis is accepted. This study found that the Risk Management Committee affects firm performance, and that Risk Management Committee acts as the intervening variable in the relationship between corporate governance, firm size, and financial reporting risk on firm performance. The existence of RMC would facilitate the company to control better the quality of financial reporting risks.

Received: June, 2017

1st Revision: Sepember, 2017

Accepted: October, 2017

DOI: 10.14254/2071-8330.2017/10-4/21

JEL Classification:  M12, M48, M34

Keywords: corporate governance, firm size, financial reporting risk, risk management, firm performance