The Moderating Effect Of Enterprise Risk Management On The Relationship Between Audit Committee Characteristics And Corporate Performance: A Conceptual Case of Jordan

The moderating effect of Enterprise Risk Management (ERM) on the relationship between
Audit Committee (AC) characteristics and corporate performance under Jordanian context remains a
challenge that is yet to be resolved. Jordan plays a significant role on Middle East economy, and
recently attracted the attention of the investors. Audit committee characteristics have a significant
effect on corporate financial and risk decision-making practices in Jordan. The fundamental AC role
is to supervise the corporate’s financial reporting practice, review of financial reports, auditing
practice, internal accounting controls, and risk management practices. Hence, the risk management
committee (RMC) and AC can potentially moderate the relationship between risk management
disclosure and firm performance. Several results of the previous literature were found fraternized,
unclear, and inconsistent regarding the ERM effect on firm performance or its effect on AC
characteristics in general context, while the literature on Jordan context remain very scarce
inaccessible. Therefore, this paper, with regards to existing literature, conceptualized that ‘ERM’
moderates the relationship between AC size, number of AC meeting, AC independence, accounting
expertise in the AC, Muslim directors in the AC, and corporate performance.
Keywords: Audit Committee Characteristic, ERM, Corporate Performance, Jordan, Moderating