Main revenue collector agencies' risk management and management accounting system practices in sustaining federal government’s revenue

The Federal Government of Malaysia is committed in strengthening long-term fiscal stability and enhancing sustainable revenue collection. Thereby, an effective implementation of risk management is necessary to enable the government in identifying the risk and taking the appropriate mitigation actions including looking into the management accounting system to achieve the targeted revenue. Therefore, this study employed the contingency theory in explaining the relationship between risk management practices and MAS, and their combined effects on organisational performance i.e. revenue collection at five main revenue collecting agencies in Malaysia. This study involves the five main revenue collecting agencies for the Federal Government of Malaysia, namely the Inland Revenue Board of Malaysia, Royal Malaysian Customs Department, Immigration Department of Malaysia, Road Transport Department Malaysia, and Royal Malaysian Police. By applying quantitative research method, 248 a survey questionnaire was distributed to staff members in the accounts, finance, and revenue collection departments of these five agencies, with a response rate of 65 percent. The results indicated that risk management practices are positively and significantly related to MAS information in broad scope, timely, integrated, and aggregated. The findings further revealed that the budgetary MAS characteristics of budget participation, budget emphasis, budget target difficulties, and budget slack had a positive and significant correlation with risk management practices. The results of moderated multiple regression confirmed that the interaction of budget participation and budget emphasis with risk management practices would enhance public sector organisational performance. The findings of this study strengthen the evidence of risk management practices in the public sector context and their linkages with MAS and organisational performance.