Risk reporting: A review of the literature and implications for future research^✩

Abstract

This paper provides a wide-ranging and up-to-date (1997-2016) review of the archival empirical risk-reporting literature. The reviewed papers are classified into two principal themes: the incentives for and/or informativeness of risk reporting. Our review demonstrates areas of significant divergence in the literature specifically: mandatory versus voluntary risk reporting, manual versus automated content analysis, within-country versus crosscountry variations in risk reporting, and risk reporting in financial versus non-financial firms. Our paper identifies a number of issues which require further research. In particular we draw attention to two: first, a lack of clarity and consistency around the conceptualization of risk; and second, the potential costs and benefits of standard-setters' involvement.

The “Walk” towards the UN Sustainable Development Goals: Does Mandated “Talk” through NonFinancial Disclosure Affect Companies’ Financial Performance?

“…The first one is to address companies' behaviors toward sustainable, ethical, and responsible choices through the so-called corporate social responsibility (CSR) actions [1,2]. The second one is to address companies' reporting toward an effective communication to users of corporate information such as investors, consumers, and other stakeholders [3][4][5]. The joint action of these two groups of initiatives should represent the only way to rebuild trust between economic actors and people [6,7], while supporting a sustainable development across the world.…”

“…With reference to the topic of NFI, generally, extant literature does not find unanimous agreement on the potential benefits deriving from more or improved regulation [11,18,19]. In fact, some scholars call for further investigation of the effect of the disclosure of nonfinancial risks [4,20]. Moreover, in a context of mandated disclosure, Dobler [21] observed that companies tend to disclose mainly information on their financial risks.…”

“…In the literature, we can observe a further gap concerning the scarcity of empirical evidence about the potential benefits of the disclosure of NFI in the stakeholder perspective. In particular, the relationship between risk disclosures and firm value is underresearched, as the NFI literature mainly focuses on the motivations supporting the companies' decision to disclose [4,20,22].…”

Does Structural Capital Affect SDGs Risk-Related Disclosure Quality? An Empirical Investigation of Italian Large Listed Companies

“…However, past research mainly focused on the disclosure of financial risk in countries where the disclosure was mandatory [43], and the usefulness of risk disclosure for stakeholders, as well as the extent of risk disclosure, have been investigated mainly with reference to financial risks [36,44,45] and its usefulness for investors [35,46]. On the contrary, the disclosure of nonfinancial risks has been scarcely investigated [45], and only recently, theoretical and empirical studies have started to investigate sustainability risk disclosure [47]. Among nonfinancial risk areas, environmental risk has received the most attention from scholars [48,49], and it is also one of the most reported sustainability issues [50].…”

“…This study, instead, intends to focus specifically on the level of risk disclosure quality (RDQ) and on its determinants in order to depict the state-of-the-art of the disclosure of nonfinancial risks in the aftermath of the EU directive in the Italian context and to contribute to filling a recognized gap in academic research [45,51,52]. Generally, in fact, prior empirical studies provide evidence that risk-related disclosure is driven by two main sets of factors, namely, the firm characteristic and corporate governance.…”