scholarly journals The Effect of Firm Internal and External Characteristics on Risk Reporting Practices among Malaysian Listed Firms

2018 ◽  
Vol 2 (2) ◽  
pp. 107
Author(s):  
Mazurina Mohd Ali ◽  
Ruzzana Abu Bakar ◽  
Erlane K Ghani
Keyword(s):  
Risk Management ◽  
Content Analysis ◽  
Risk Disclosure ◽  
Listed Firms ◽  
Reporting Practices ◽  
Ceo Tenure ◽  
Auditor Quality ◽  
External Characteristics ◽  
Risk Management Committee ◽  
Risk Reporting

This study examines the effect of firm internal and external characteristics on risk reporting practices among the Malaysian public listed firms. Specifically, this study focuses on three internal characteristics namely, duality of board leadership, the presence of stand-alone risk management committee, and length of CEO tenure and external characteristics namely, competition, debt governance and auditor quality on the risk reporting practices among the Malaysian public listed firms. Using, content analysis on 200 top public listed firms in Bursa Malaysia, this study shows that one of the external characteristics namely, debt governance significantly influence risk disclosure among the Malaysian public listed firms. This study however, shows that none of the internal characteristics influence risk disclosure among the Malaysian public listed firms. The finding of this study provide further understanding on the nature of risk disclosure of Malaysian public listed firms.

Risk disclosure in listed Greek companies: the effects of the financial crisis

2020 ◽  
Vol 33 (4/5) ◽  
pp. 615-633
Author(s):  
Fragiskos K. Gonidakis ◽  
Andreas G. Koutoupis ◽  
Anastasios D. Tsamis ◽  
Maria-Eleni K. Agoraki
Keyword(s):  
Content Analysis ◽  
Financial Crisis ◽  
Stock Exchange ◽  
Annual Reports ◽  
Risk Disclosure ◽  
Content Type ◽  
Reporting Practices ◽  
Athens Stock Exchange ◽  
Risk Reporting

Purpose The purpose of this study is to investigate risk disclosure in listed Greek companies. The effects of the financial crisis were also considered. Design/methodology/approach This study aimed to determine the risk-reporting practices of Greek’s non-financial companies listed on the Athens Stock Exchange through a content analysis of their annual reports. Findings Risk identification and anticipation protect businesses and create shareholder value. In recent years, particularly since the economic crisis, risk has become one of the most important business issues. This study concluded that during the crisis, there was an increase in disclosure. Financial, personnel and legal risks were the most reported types of risk. This study also found liquidity to be a very important issue. Research limitations/implications Content analysis has limitations because subjectivity cannot be eliminated. This study measured only the quantity, not the quality, of risk disclosure. The quality of risk reporting will be examined in future research. Originality/value This is the first study on risk disclosure in the non-financial companies listed on the Athens Stock Exchange to conduct a content analysis of the corporate annual reports.

scholarly journals Risk disclosure behaviour: evidence from the UK extractive industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Stuart Mcchlery ◽  
Khaled Hussainey
Keyword(s):  
Risk Management ◽  
Oil And Gas Industry ◽  
Mandatory Reporting ◽  
Specific Information ◽  
Mandatory Disclosure ◽  
Risk Disclosure ◽  
Extractive Industry ◽  
Content Type ◽  
Risk Profiling ◽  
Risk Reporting

PurposeThis paper contributes to risk management research with reference to disclosure of risk specific information within the oil and gas industry. This paper provides empirical evidence regarding voluntary and mandatory disclosure behaviour from both a quantitative and qualitative perspective.Design/methodology/approachA longitudinal empirical study examines probabilistic reserve quantum reporting of UK companies, over a time-period spanning voluntary and mandatory disclosure. The researchers analyse disclosure behaviour under voluntary and mandatory time spans using a logistical regression approach to measure determinants of risk reporting. Form of regulation is considered as the fundamental driver for disclosure whilst controlling for other relevant variables. Implications for developing international regulation are presented with suggestions for further research.FindingsMandatory reporting is not seen as a significant influence to disclosure. Degree of risk, quality of audit firms, level of stock exchange and organisational visibility each impact on disclosure. The findings indicate that a mandatory disclosure approach is ineffective, partially explained by mimetic and normative forces and a balancing of agency-related costs and benefits. There is an inverse relationship between level of risk and risk reporting.Research limitations/implicationsGeneralisation of the findings is limited due to the specific context of the extractive industry.Practical implicationsThe paper seeks to inform the International Accounting Standards Board's (IASB) on-going consideration of risk reporting and also its extractive industries deliberations.Originality/valueThe paper provides original insight into the area of risk management with particular focus on risk specificity and quantitative metrics for risk profiling not previously tested. The paper introduces risk profiling as a variable in risk disclosure.

Informativeness Assessment of Risk and Risk-Management Disclosure in Corporate Reporting: An Empirical Analysis of Italian Large Listed Firms

2019 ◽  
pp. 9-41 ◽  
Author(s):  
Francesco De Luca ◽  
Ho-Tan-Phat Phan
Keyword(s):  
Risk Management ◽  
Specific Information ◽  
Risk Disclosure ◽  
Specific Level ◽  
Listed Firms ◽  
Corporate Reporting ◽  
Related Information ◽  
Industry Type ◽  
Disclosure Requirements ◽  
Two Phases

Purpose Risk-related information is prevalently used in the decision-making process by various counterparties. Therefore, this study investigates how compa-nies conduct their risk-disclosure practice after the new Italian Legislative Decree No. 254 of December 30, 2016. In particular, we draw attention to three aspects: (1) the interaction relationship among risk or risk management (RRM), industry, type of risk, and level of specific disclosure; (2) the variation of specific level of disclosing risk-related information across the industries and types of risk; and (3) the different behavior between risk and risk-management disclosure in the after-math of the regulation's issuance. Design/methodology/approach The study is based on a sample of large un-dertakings and groups that are subject to the Legislative Decree. Two phases of content analysis were executed to analyze the risk and risk-management disclosure. The research questions were investigated with the row effects loglinear model. Findings Our result shows that there are interaction relationships among RRM, type of risk, industry, and level of specific disclosure. Companies provide risk-related information at different levels of specificity depending on whether the information is risk description or risk management, the firms are operating in manu-facturing or nonmanufacturing, and the type of risk that the firms disclosed in their reports. Practical implications The paper provides evidence of inconsistent company behavior in disclosing company-specific information in favor of internal and ex-ternal stakeholders, particularly by balancing company-specific disclosure be-tween risk descriptions and risk-management policies. Policymakers might also consider this current phenomenon to decide to what extent disclosure requirements should be detailed and, instead, what room should be left for management discre-tion with respect to users' needs. Originality/value This paper is an up-to-date assessment of Italian firms' compliance with Legislative Decree No. 254 of December 30, 2016.

Dynamic accountability and the role of risk reporting during a global pandemic

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chiara Crovini ◽  
Stefan Schaper ◽  
Lorenzo Simoni
Keyword(s):  
Risk Management ◽  
Information Needs ◽  
Risk Recognition ◽  
Content Type ◽  
Reporting Practices ◽  
Global Pandemic ◽  
Conceptual Paper ◽  
The Impact ◽  
Risk Reporting

PurposeThis article lays out some conceptual considerations of how dynamic accountability and risk reporting practices could be tailored during and after a global pandemic.Design/methodology/approachThis conceptual paper seeks to foster the debate on the crucial role of risk reporting considering the impact and uncertainty caused by the coronavirus disease 2019 (COVID-19) pandemic and stakeholder information needs in this context. The authors draw upon neo-Durkheimian institutional and legitimacy theories and elements of the accounting and risk management literature to discuss the challenges that the pandemic poses to risk recognition and assessment and the subsequent disclosure decision of risk information.FindingsRisk reporting has its roots in risk recognition and assessment. To live up to their accountability in these times of uncertainty, organisations need to address their stakeholders' new and changing information needs. Ad hoc disclosures and linking risk management and reporting to their business models (BM) would improve the risk recognition and assessment practices and the meaningfulness of the disclosed information. Hence, we provide some examples and discuss potential avenues to address these challenges and adapt risk reporting accordingly.Originality/valueThis conceptual paper contributes to the risk reporting and accountability research fields. Previous studies on communication during a crisis have focused on sustainability reporting. Thus, this study contributes to that literature by considering the role of risk reporting in times of an unexpected large-scale global crisis, such as the COVID-19 pandemic, and by highlighting possibilities for moving risk reporting towards becoming more accountability based.

scholarly journals Determinants and impacts of risk disclosure quality: evidence from China

2018 ◽  
Vol 19 (4) ◽  
pp. 518-536 ◽  
Author(s):  
Tamer Elshandidy ◽  
Lorenzo Neri ◽  
Yingxi Guo
Keyword(s):  
Content Analysis ◽  
Ordinary Least Squares ◽  
Market Liquidity ◽  
Risk Disclosure ◽  
Disclosure Quality ◽  
Content Type ◽  
Financial Firms ◽  
The Impact ◽  
Risk Reporting

PurposeFew studies have focused on emerging markets owing to difficulties in identifying the real effect of disclosures on these economies. To fill this gap, the purpose of this paper is to first: investigate the main drivers for risk disclosure quality for Chinese financial firms, second: further study the impact of such disclosure on market liquidity.Design/methodology/approachThe sample comprises all financial firms listed in the Shanghai A-shares market for the period 2013–2015. By relying on manual content analysis of annual reports, the risk disclosure quality is measured through a multidimensional approach which encompasses three factors: quantity of disclosure, coverage of disclosure and the semantic properties of depth and outlook. The findings of this paper are based on ordinary least squares and fixed-effects estimations.FindingsThe findings suggest that firm characteristics (especially size) influence risk disclosure practices of Chinese financial companies. Furthermore, the authors found that risk disclosure quality has an impact on market liquidity, and when the authors analysed each year the authors noticed that the results were driven by the year 2013; moreover, the authors noticed no or little significance from the period of the emerging financial crisis.Research limitations/implicationsThe sample of this paper is limited to financial firms in China. The usage of manual content analysis limits the authors’ ability to investigate risk reporting drivers and its impact on market liquidity on a large scale.Practical implicationsThe importance of this paper stems from documenting several reporting incentives concerning not only firms’ quantity, but also firms’ quality of risk reporting. Collectively, the findings support activism for reforms and the enhancement of regulations in China in order to make the market more efficient.Originality/valueThis paper provides new evidence for financial companies in China on the principal drivers for risk disclosure quality and highlights how the quality of such disclosure impacts market liquidity. Furthermore, this paper confirms previous findings on the Chinese market (Ball et al., 2000; Zou and Adams, 2008) in which, given a decreasing but still strong state presence, there is higher stock volatility and weak corporate governance.

scholarly journals Incentives facing UK-listed companies to comply with the risk reporting provisions of the UK Corporate Governance Code

2016 ◽  
Vol 22 (1) ◽  
pp. 127-152 ◽  
Author(s):  
P. Klumpes ◽  
C. Ledlie ◽  
F. Fahey ◽  
G. Kakar ◽  
S. Styles
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Financial Reports ◽  
Listed Firms ◽  
Reporting Practices ◽  
Corporate Governance Code ◽  
Future Viability ◽  
The Uk ◽  
Corporate Risk ◽  
Risk Reporting

AbstractRecent changes made to the UK Corporate Governance Code require UK firms to report new or enhanced narrative information concerning their principal risks, their risk management processes and their future viability. This paper analyses whether the level and nature of voluntary compliance with these new requirements is consistent with alternative economic and political visibility incentives. We analyse relevant sections of financial reports produced by industry-matched samples of large-, mid- and small-cap UK-listed firms during the transitional 2013–2014 financial reporting years. Both specific and generic readability attributes of the reports are measured. We find that virtually no firm in our sample has provided any viability statement. Empirical analysis of disclosures concerning principal risk assessment and review processes appear to be primarily motivated by political visibility reasons. Examples of particularly good and cases of poor corporate risk reporting practices are also discussed. Possible implications for the actuarial profession are discussed.

scholarly journals KARAKTERISTIK DEWAN KOMISARIS, KOMITE DAN PENGUNGKAPAN RISIKO PERUSAHAAN

2018 ◽  
Vol 8 (2) ◽  
pp. 115
Author(s):  
Andre Falendro ◽  
Faisal Faisal ◽  
Imam Ghozali
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Significant Influence ◽  
Audit Committee ◽  
Stock Exchange ◽  
Enterprise Risk Management ◽  
Risk Disclosure ◽  
Corporate Governance Mechanisms ◽  
Enterprise Risk ◽  
Risk Management Committee

This study examines the influences of board of commissioneer and committee characteristics on the extent of enterprise risk management disclosure. The sample consists of  168 non-financial companies listed on Indonesia Stock Exchange for period of 2014-2016. A risk disclosure index is used to measure the extent of such disclosure. The results show that the presence risk management committee has a significant effect on the extent of risk disclosure. However, other board and committee characteristics doesn’t have significant influence on risk disclosure. The result of this suggests that corporate governance mechanisms, specifically board and audit committee have not fully explained their role in enhancing transparency, especially in communicating corporate risks.  

scholarly journals Does enterprise risk management impact accounting quality? Evidence from the Nigerian financial institutions

2019 ◽  
Vol 16 (4) ◽  
pp. 16-27
Author(s):  
Adedayo Erin Olayinka ◽  
Uwalomwa Uwuigbe ◽  
Eriabie Sylvester ◽  
Olubukola Ranti Uwuigbe ◽  
Omoike Osereme Amiolemen
Keyword(s):  
Risk Management ◽  
Generalized Method Of Moments ◽  
Enterprise Risk Management ◽  
The Body ◽  
Accounting Quality ◽  
Risk Disclosure ◽  
African Countries ◽  
Listed Firms ◽  
Corporate Websites ◽  
Enterprise Risk

This research empirically looked at Enterprise Risk Management impact on accounting quality of selected listed firms in the Nigerian financial sector. The study engaged the use of content analysis of the selected listed firms’ annual financial reports and corporate websites in determining the ERM disclosure index and its impact on accounting quality for a period of five years (pre-ERM period) (2007–2011) and another five years period (post-ERM period) (2013–2017). In attaining the proposed objectives, the study employed the panel Generalized Method of Moments estimator to test the hypotheses and find out the relationship between the variables. The study observed from the findings that there is no significant association between enterprise risk management and accounting quality during the pre-ERM period. This study adds to the body of knowledge in the area of corporate reporting, risk disclosure, risk management and accounting quality in emerging economies especially the Sub-Saharan African countries.

scholarly journals Climate risk reporting practices by UK insurance companies and pension schemes

2019 ◽  
Vol 24 ◽  
Author(s):  
P. Klumpes ◽  
M. Acharyya ◽  
G. Kakar ◽  
E. Sturgess
Keyword(s):  
Climate Change ◽  
Risk Management ◽  
Annual Reports ◽  
Insurance Companies ◽  
Climate Risk ◽  
Pension Scheme ◽  
Financial Risks ◽  
Reporting Practices ◽  
Pension Schemes ◽  
Risk Reporting

Abstract Increasing global concern over the impact of climate change has recently led to public scrutiny over the adequacy of existing risk management practices by insurance companies and pension schemes in dealing with these challenges that potentially impact both individual actuaries and the Institute and Faculty of Actuaries generally. Most recently, the Prudential Regulation Authority has issued further guidance concerning its expectations for the UK insurance industry regarding the development of an approach to disclosure on and management of the financial risks from climate change, while a Parliamentary Committee has demanded public clarification from UK pension scheme trustees regarding their degree of engagement with incorporating climate-related financial risks into their investment decision-making. The aim of this paper is to identify the dominating factors of the current evolvement of UK insurance companies’ and pension schemes’ climate risk disclosure practices. This paper analyses both the nature and extent of changes in the risk reporting practices of these entities that have evolved in order to meet these demands for increased accountability. We first analyse relevant sections of latest annual reports produced by a sample of 15 UK insurance companies and 15 pension schemes. We find only limited alignment of insurance firm and pension scheme annual reports with the 11 specific Task Force on Climate-Related Financial Disclosure’s (TCFD) recommended disclosures. We also examine what key financial risk and/or other organisational characteristics are most closely associated with the degree of alignment with TCFD specified disclosures related to governance, strategy, risk management and performance metrics. We find that incentives facing sample insurance companies to align their climate-related disclosures with TCFD recommendations are related to their management of reputation risk (measured on the basis of size and type of business). Whereas the incentives facing pension schemes are related to the desire to reduce information asymmetry (measured by liability risk) among their stakeholders concerning this issue. Further, consistent with a stakeholder theory explanation, it appears that only a minority of large, publicly listed insurance companies and large local government pension schemes are taking action to report on their actions to mitigate climate risk. We also discuss examples of best practice climate risk reporting. The implications for the actuarial profession in engaging with climate risk are discussed in line with the findings of the study.

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