Improving the relevance of risk factor disclosure in corporate annual reports

Santhosh Abraham, Philip Shrives

    Research output: Contribution to journalArticlepeer-review

    85 Citations (Scopus)
    6 Downloads (Pure)

    Abstract

    This research develops a model for assessing the quality of risk disclosures and applies the proposed model to four companies in the food production and processing sector. We contribute to the literature by extending prior work on risk disclosure quality using a longitudinal approach to assess the quality of risk reporting. While previous studies have described disclosure practices, this paper adopts a normative approach to disclosure. By suggesting a way of improving risk reporting disclosures, the paper provides guidance for current and future company managers. In line with previous research, this paper identifies certain problems with existing risk disclosures. Results suggest that company managers prefer providing disclosures that are symbolic rather than substantive. We argue that institutional factors and proprietary costs contribute towards and can explain this behaviour. In suggesting a way forward we highlight the role that stakeholders including managers, users, regulators and auditors can play in improving the quality of risk reporting. Flexibility in reporting could be maintained by adopting a properly monitored ‘comply or explain’ approach.
    Original languageEnglish
    Pages (from-to)91-107
    JournalThe British Accounting Review
    Volume46
    Issue number1
    DOIs
    Publication statusPublished - Mar 2014

    Fingerprint

    Dive into the research topics of 'Improving the relevance of risk factor disclosure in corporate annual reports'. Together they form a unique fingerprint.

    Cite this