The key role of accounting intelligence and risk management in the practical economy: a new insight into company profitability

Ping Chen, Yuechao Zhu, Huihua Zheng and Shanqiu Liu

Abstract

In the face of rapid technological advancements and the ever-changing international situation, enterprise risk management (ERM) is becoming increasingly important and valuable. However, there is currently a lack of clear understanding of risk management and the connections between risk factors, and most of the data comes from European and North American countries, meaning there is a lack of empirical analysis of the differentiation mechanism for emerging market economies. In response to these issues, this study uses partial least squares structural equation modeling and response surface methodology to explore the example of a Malaysian financial industry. The results show that ERM significantly improves both financial performance (p < 0:01) and nonfinancial performance (p < 0:05), while the technology investment compensation system is weak. These results indicate that the moderating effect of accounting intelligence enhances the effectiveness of ERM. By embedding ERM into a dynamic capability framework, this study provides a new perspective on the complex relationship between ERM and enterprise performance, and should serve as a reference for understanding enterprise practices in emerging markets.