Indonesia Conference Directory

This study explores the compliance of the listed companies in Malaysia on the Statement of Risk Management and Internal Control (SRMIC). Risk management and internal control are vital for an effective corporate governance. Sustainability of a company is perceived to be correlated to its corporate governance effectiveness. An effective risk management helps companies to achieve targeted performance. Internal control system, conversely, should provide reasonable assurance that an adverse impact arising from future event is at an acceptable level. In 2015, SRMIC commissions the need to examine the compliance of its requirements. Annual reports of 746 companies listed on the Bursa Malaysia for 2015 and 2016 were examined. Findings show that only 2.5% companies disclose all the mandatory risk management items whereas 97.5% companies disclose only 88% of these items. Besides, 83.4% companies disclose information concerning assurance from CEO and CFO on whether the companies- risk management and internal control system is operating adequately and effectively. Finally, some of the companies voluntarily disclose information related to the external auditors, internal audit function, internal control opinion, risk appetite, soundness of risk management and internal control system. The findings evidence the companies- engagements towards the demands for a more effective corporate governance.