A Proposed Accounting Index for Measuring the Impact of Geopolitical Risks and Their Implications on Corporate Governance Mechanisms in Egyptian Companies: An Exploratory Study

This research aimed to develop an accounting index to measure the effects of geopolitical risks and their implications for corporate governance. Using a positive research approach, it first analyzed prior accounting studies to derive key hypotheses. Next, it reviewed models measuring geopolitical risks—such as SWOT, PESTLE, multidimensional risk, neural network, and dynamic risk prediction models—to identify key indicators for a composite index. This index integrates political, economic, social, and environmental risk dimensions. Finally, the research predicted how these geopolitical risks impact practical accounting aspects of both internal and external corporate governance.
The research results revealed that geopolitical risks significantly impact corporate governance. Consequently, corporate managers should enhance governance by strengthening audit committee responsibilities, expanding the role of external auditors, and disclosing risks related to political, economic, social, and environmental factors.
The exploratory study findings support the theoretical hypotheses that geopolitical risks are multidimensional and should be comprehensively integrated into internal and external audit processes and disclosure functions to strengthen corporate governance mechanisms. This research extends prior accounting studies by providing practical evidence in this area