What Drives Quality of Firm Risk Disclosure?

Miihkinen, Antti

doi:10.1016/j.intacc.2012.10.005

Cited by 173 publications

(82 citation statements)

References 48 publications

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“…The information tends to be qualitative, with very few quantitative specifications of the probability of occurrence of a risk and its estimated impact, especially for nonfinancial risks (Ali, 2005;Beretta & Bozzolan, 2004;Berger & GleiSSner, 2006;Cabedo & Tirado, 2009;Campbell, Chen, Dhaliwal, Lu, & Steele, 2010; Canadian Institute of Chartered Accountants [CICA], 2012; Dobler et al, 2011;Graco, 2012;Hernández Madrigal, 2011;Lajili, 2009;Linsley & Shrives, 2006;Miihkinen, 2012;Oliveira, 2012;Price-waterhouseCoopers [PwC], 2014;Rodríguez Domínguez & Nogera Gámez, 2014).…”

Section: Quality Of the Risk Information Provided By Listed Companiesmentioning

confidence: 99%

Present and future of risk disclosure in Spanish non-financial listed companies

Amezaga-Alonso

Carrasco²,

Bilbao³

et al. 2020

RC-SAR

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Este trabajo investiga las razones y los beneficios esperados por las empresas españolas cotizadas no financieras para divulgar información sobre riesgos, así como las posibles motivaciones para no hacerlo. Investiga la situación actual de la divulgación de riesgos, pero también mira hacia adelante y estudia cómo será ésta en un futuro próximo. A la vista de un entorno cada vez más demandante de información, busca ideas que permitan mejorar esta práctica. Con el objetivo de conseguir los puntos de vista de las partes implicadas (preparadores y usuarios de la información de riesgos) y obtener una opinión consensuada entre ellos, realizamos un estudio Delphi. El grupo de expertos estuvo formado por veintidós personas, trece directores de auditoría interna de empresas españolas cotizadas no financieras, cinco analistas financieros y cuatro académicos. Realizamos tres rondas de preguntas entre los meses de enero y julio de 2017.El estudio concluye, entre otras cosas, que la demanda de información sobre riesgos aumentará en los próximos años, que los beneficios derivados de la divulgación compensan a las empresas de cualquier coste asociado a ella, y que el legislador debe desarrollar más disposiciones legales que aseguren mayor claridad y consistencia de la información, y mayor comparabilidad entre compañías. This paper researches the reasons and expected benefits of Spanish non-financial listed companies for disclosing risk information as well as the possible motivations for not doing so. It investigates the current situation of risk disclosure but also looks forward and studies what it will be like in the near future. In view of an increasingly information demanding environment, it looks for ideas for improving the risk disclosure practice.With the objective of gathering insights from the parties involved (preparers and users of risk information) and getting an agreed view among them, we conducted a Delphi study. The group of experts was made up of twenty-two people, thirteen internal audit directors from Spanish non-financial listed companies, five financial analysts and four scholars. We ran three rounds of questions between the months of January and July of 2017. The study concludes, among other findings, that the demand for risk disclosure will increase in coming years, that the benefits of disclosing offset any kind of associated costs, and that the policy maker should develop more legal provisions to ensure greater clarity and consistency of risk information and more comparability among companies.

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Section: Quality Of the Risk Information Provided By Listed Companiesmentioning

confidence: 99%

Present and future of risk disclosure in Spanish non-financial listed companies

Amezaga-Alonso

Carrasco²,

Bilbao³

et al. 2020

RC-SAR

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“…Extant risk disclosure studies have focused, and rightly so, on risk disclosure orientation in terms of forward looking vs. historical (Dobbler et al, 2011), good vs. bad news (Linsley and Shrives, 2006) and whether risk disclosure is voluntary or mandatory (Elshandidy and Neri, 2015), and other have examined risk disclosure generally, including the impacts of corporate governance (Elshandidy et al, 2013;Elzahar and Hussainey, 2012;Miihkinen , 2012;Ntim et al, 2013). However, not many studies have examined risk disclosures in the annual reports of UK banks and certainly not in the annual reports of the distressed banks during the recent financial crisis.…”

Section: Literature Reviewmentioning

confidence: 99%

Non-Financial Risk Disclosure: The Case of the UK’s Distressed Banks

Adelopo¹

2017

AABFJ

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This study investigates the narratives risk disclosures of the four British financial institutions that were adversely affected during the 2008 banking crisis. This investigation uses content analysis with the aid of Concordance software to explore the risk disclosure of these companies for the period 1998-2008. Risk disclosures in the Business Review sections of the annual reports of the banks were analysed into their historic and forward looking contents, and current firm performance was measured with respect to earnings per share (EPS) and dividend, while future performance was measured by growth in EPS, and positive time lag in EPS.Consistent with its predictions, the study found a significant negative relationship between the extent of historic narrative disclosures and current and future firm performance, and a significant positive relationship between forward looking narrative risk disclosures and both current and future firm performance. Additional analysis shows that optimistic and pessimistic narrative risk disclosures are not significant in explaining current and future firm performance for these firms.Findings from this study are important for users of the financial statements and regulators because they highlight an opportunity to detect warning signals for companies at risk of collapse. The study adds to the growing number of empirical investigations that provide alternative approaches to understanding business failures. AbstractThis study investigates the narratives risk disclosures of the four British financial institutions that were adversely affected during the 2008 banking crisis. This investigation uses content analysis with the aid of Concordance software to explore the risk disclosure of these companies for the period 1998-2008. Risk disclosures in the Business Review sections of the annual reports of the banks were analysed into their historic and forward looking contents, and current firm performance was measured with respect to earnings per share (EPS) and dividend, while future performance was measured by growth in EPS, and positive time lag in EPS. Consistent with its predictions, the study found a significant negative relationship between the extent of historic narrative disclosures and current and future firm performance, and a significant positive relationship between forward looking narrative risk disclosures and both current and future firm performance. Additional analysis shows that optimistic and pessimistic narrative risk disclosures are not significant in explaining current and future firm performance for these firms. Findings from this study are important for users of the financial statements and regulators because they highlight an opportunity to detect warning signals for companies at risk of collapse. The study adds to the growing number of empirical investigations that provide alternative approaches to understanding business failures. JEL Classification: M40

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“…closures (Li and Rong, 2010;Miihkinen, 2012;Abraham and Shrives, 2014). Worldwide regulators assume that narrative disclosures are important to increase the decision usefulness of disclosures (Core, 2001).…”

Section: Quality Of Disclosures and Taxonomiesmentioning

confidence: 99%

Towards an XBRL-Enabled Corporate Governance Reporting Taxonomy: An Empirical Study of NYSE-Listed Financial Institutions

Beerbaum

2015

SSRN Journal

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What Drives Quality of Firm Risk Disclosure?

Cited by 173 publications

References 48 publications

Present and future of risk disclosure in Spanish non-financial listed companies

Present and future of risk disclosure in Spanish non-financial listed companies

Non-Financial Risk Disclosure: The Case of the UK’s Distressed Banks

Towards an XBRL-Enabled Corporate Governance Reporting Taxonomy: An Empirical Study of NYSE-Listed Financial Institutions

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