Abstract
PurposeThis study aims to investigate the direct relationship between management accounting systems effectiveness (MASE) and enterprise risk management (ERM). In addition, it aims to investigate the interaction (moderating) effect of each of the four informational characteristics of MASE and each of the three components of perceived environmental uncertainty (PEU) on ERM, using empirical evidence from the developing country's Jordanian market.Design/methodology/approachThe study population includes all Jordanian companies listed on the Amman Stock Exchange at the end of 2019, and the study sample consists of all these companies (complete surveying – census population). This study chooses a quantitative method through a survey design approach using questionnaire as the best method for data collection.FindingsThe summation of the relationship and interaction effects (moderation) examined by this study are as follows: three of the four informational characteristics of MASE, namely, a broadness of scope, an aggregation and an integration, have a positive direct relationship with ERM. The characteristic ‘timeliness’ has non-significant negative relationship with ERM. Additionally, the interaction (moderating) effect of higher levels of two informational characteristics of MASE, namely, a timeliness and an aggregation and higher level of perceived competitor uncertainty, will result in a higher ERM implementation.Research limitations/implicationsThe results of this study have significant ramifications for numerous companies, administrators and interested parties, as they may allow them to build and sustain effective accounting processes for management. These results support adopting sophisticated management accounting systems (MASs) instead of traditional systems in the companies to help them in improving the information quality and control levels, as well as reducing the risks by implementation of ERM. In addition, to ensure that companies are confronted with the environmental factors they face. The results of the present study will enable administrators to develop a deeper understanding of such management accounting systems.Originality/valueTo the best of the knowledge, this is the first study of Jordan to investigate the relationship between MASE and ERM, moderated by PEU. As such, the study raises significant findings, drawing attention to MASs and their role in Jordan.
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