Internal Audit Maturity and Governance Transparency as Mediators between Financial Risk Management, Entrepreneurial Leadership and Organizational Resilience

Abstract

The effects of risk management along with entrepreneurial leadership on organizational resilience serves as the focus of this study. Additionally, this study aims to explore the dual mediating role of Internal Audit Maturity and Governance Transparency in the relationship between Financial Risk Management, Entrepreneurial Leadership, and Organizational Resilience. The sample size of this study comprises of 375 participants from textile, glass, and light engineering SMEs in Faisalabad, Pakistan. Primary data was collected through structured questionnaires featuring 5-point Likert scales. The data was analyzed using structural equation modeling (SEM) with confirmatory factor analysis and bootstrapped mediation analysis. As per the study results, strategic financial risk management and entrepreneurial leadership practices have a strong impact on organizational resilience. Furthermore, the relationships are mediated with internal audit maturity and governance transparency. SME managers in Faisalabad should focus on entrepreneurial leadership behaviors and financial risk management practices, while reinforcing internal audit systems and governance transparency, to ensure adaptability and rapid recovery during disruptions. It contributes by clarifying how entrepreneurial vision and financial safeguards interact with governance mechanisms to build resilience in manufacturing SMEs within emerging economies. The current research sample size and geographical location are the main limitations of the study.