This study investigates how COSO ERMI (Enterprise Risk Management Index) influence on managerial ability and investment efficiency relation. Variables include managerial ability as independent variable that measure by the methodology developed in Demerjian et al. (2012) to estimate managerial ability, and over- or under-investment as dependent variables that measured by Gan (2015) and Biddle et al. (2009). Also ERMI are measured by Gordon et al (2009). The sample includes 106 companies listed in Tehran Stock Exchange (TSE) for a period of 2007 to 2016. Panel data based fixed effect regression showed that ERMI collectively have effect on relation between managerial ability and capital investment efficiency and inefficiency. But the study shows that interactive effect between aggregate ERMI and managerial ability cannot influence on relation between managerial ability and investment efficiency and inefficiency.
