Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)

Abstract

The Determinant Factors of Enterprise Risk Management (ERM) and Credit Risk Consequence of Indonesian Banks

Author(s): Husaini, Saiful

Since the banking industry faces the more varied risks compared to other industries, banks managers should implement well the holistic risk reducing system that enterprise risk management (ERM) to reduce risks. Unfortunately, anecdotal and empirical evidence show some some factors influence the ERM implementation levels and ERM adoption was not always followed by credit risk reducing. This study aims to examine the determinant factors of enterprise risk management (ERM) implementation and it's consequently on credit risk-reducing of Indonesia banks. The sample of this study consists of 17 Indonesian banks that listed in Indonesia Stock Exchange during the seven (7) years observation from 2007-2013. This study found that audit committee, audit internal and the complexity of the companies are determinants factors of the implementation of enterprise risk management of Indonesian listed banks. However, this study also could not provided the consequence of enterprise risk management on Indonesian banks' credit risk reducing.

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