Risk Disclosures in the Annual Reports of Italian Listed Companies

2014 ◽  
pp. 141-168
Author(s):  
Lorenzo Neri ◽  
Antonella Russo
Keyword(s):  
Voluntary Disclosure ◽  
Stock Exchange ◽  
Empirical Work ◽  
Annual Reports ◽  
Risk Disclosure ◽  
Listed Firms ◽  
Risk Disclosures ◽  
The Relationship ◽  
Increases In Risk ◽  
Risk Reporting

The study examines the relevance of risk reporting in the field of firm voluntary disclosure with an empirical work on Italian listed firms. The motivation of this study is the implementation of the Directive 51/2003/CE in Italy (D.Lgs. 32/2007), a sample of companies listed on the Italian Stock Exchange is selected to investigate the relationship between risk disclosure and company characteristics. This paper explores whether there are significant increases in risk reporting over a period of five years and investigates if risk disclosure is influenced only by new law requirement or also by other possible drivers. A content analysis is performed to obtain a measure of risk narrative disclosure. Then several hypothesis tests are carried out to verify whether there are any corporate differences between companies with different levels of risk disclosure, using univariate and multivariate analysis. Our results on the first question document significant increases in Italian companies' levels of risk disclosures. We find also that the disclosure is not only determined by the new law requirements but also by other drivers such as company size.

Is Voluntary Disclosure Value Relevant? Evidence from Top Listed Firms in India

2021 ◽  
pp. 097226292098629
Author(s):  
Rupjyoti Saha ◽  
Kailash Chandra Kabra
Keyword(s):  
Voluntary Disclosure ◽  
Value Relevance ◽  
Stock Exchange ◽  
Market Value ◽  
Policy Implications ◽  
Positive Contribution ◽  
Listed Firms ◽  
Strategic Disclosure ◽  
Relevant Evidence ◽  
The Relationship

In view of ongoing reforms in India with emphasis on improving transparency of corporate, the present study aims to examine the influence of voluntary disclosure on the market value of India’s top-listed firms. To this end, the study uses a sample of top 100 non-financial and non-utility firms listed at Bombay Stock Exchange based on market capitalization over a 5-year period (2014–2018). To control potential endogeneity in the relationship between voluntary disclosure and firms’ market valuation, fixed effect panel data model and two-stage least squares model of estimation have been employed. The result obtained from the analysis suggests that enhanced level of voluntary disclosure significantly improves the market value of sample firms. The study further undertakes additional analysis by categorizing voluntary disclosure into its sub-components wherein the findings reveal that three components of voluntary disclosure such as corporate and strategic disclosure, forward looking disclosure and corporate governance disclosure make positive contribution towards market value of firms, while the remaining components of voluntary disclosure such as human and intellectual capital disclosure and financial and capital market disclosure do not appear to have any significant influence on the same. Overall, the finding suggests that voluntary disclosure made by sample firms is considered relevant by investors. However, value relevance of different components of voluntary disclosure varies with the nature and extent of information disclosed. The study offers some important policy implications.

scholarly journals Organizational Culture and Voluntary Disclosure Practices of Listed Firms in Nigeria

2018 ◽  
Vol 1 (1) ◽  
pp. p51 ◽  
Author(s):  
Nyahas Samson Iliya ◽  
Joseph M. Ntayi ◽  
Nixon Kamukama ◽  
John C. Munene
Keyword(s):  
Organizational Culture ◽  
Voluntary Disclosure ◽  
Structural Equation ◽  
Survey Design ◽  
Equation Model ◽  
Annual Reports ◽  
Cross Sectional ◽  
Strict Adherence ◽  
Listed Firms ◽  
The Relationship

The purpose of this paper is to test the relationship between organizational culture and voluntary disclosure by listed firms in Nigeria. The research design for the study is survey design that is cross-sectional nature to examine the relationship among the study variables. Data for organizational culture were obtained from administration of questionnaire while that for voluntary disclosure were from financial reports of 92 listed companies. To test our main hypotheses, we used Structural Equation Model (SEM) especially PLS-SEM. The results indicate that both ritualism and opportunism dimensions of organizational culture are positively associated with voluntary disclosure. This implies that, firms’ emphasis on rules as well as flexibility in response to changing environmental needs promote the practice of voluntary disclosure in annual reports. This study concludes that voluntary disclosure is associated with flexibility in policies and disclosure rules as well as strict adherence to laid down guideline for the identification and measurement of disclosure items.

scholarly journals The impact of structure-related variables on forward-looking disclosure in the annual reports of non-financial Egyptian companies

2013 ◽  
Vol 11 (1) ◽  
pp. 111-125
Author(s):  
Bassam Baroma
Keyword(s):  
Voluntary Disclosure ◽  
Information Disclosure ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Annual Reports ◽  
Listed Firms ◽  
The Impact ◽  
Egyptian Stock Exchange ◽  
Forward Looking

The main objective of this study is to test the relationship between numbers of variables representing firm characteristics (structure-related variables) and the extent of voluntary disclosure levels (forward-looking disclosure) in the annual reports of Egyptian firms listed on the Egyptian Stock Exchange. This study uses empirically investigate hypothesized impacts of structure-related variables on the extent of forward-looking disclosure. This study uses a list of forward-looking keywords to determine the differences in the level of forward looking disclosure between firms in different sectors. The sample includes 49 non-financial firms listed on the Egyptian Stock Exchange for the years 2008, 2009 and 2010. Statistical analysis is implemented using a multiple linear regression analysis. The results show that firm size is significantly positive (in all the three years) with the level of forward-looking disclosure. Firm age also is, only for the year 2008, and with insignificant association with the level of forward-looking disclosure in years 2009 and 2010. On the other hand, leverage and ownership dispersion variables are found being insignificantly associated with the level of forward-looking information disclosed in the annual reports for all the three years. There are some limitations in this study. First, the study uses the same list of forward-looking items as applied in previous studies. Second, the selected items do not show observed importance levels by financial information users. Third, the study applies an “unweights” approach to measure the level of forward-looking disclosure. Finally, the study concentrates on non-financial listed firms on the Egyptian Stock Exchange and excluded financial and insurance firms. Few studies have examined the forward-looking information disclosure in developing countries, particularly in the Middle East; no study has yet tested disclosure of forward-looking information in the annual reports for Egyptian firms. Furthermore, all previous studies examined the forward-looking disclosure in the annual reports for a sole year: this study examines it for a somewhat longer period (three years).

scholarly journals Linkages between ownership concentration and financial ratio communication

2010 ◽  
Vol 8 (1) ◽  
pp. 76-86
Author(s):  
Norhani Aripin ◽  
Greg Tower ◽  
Grantley Taylor
Keyword(s):  
Financial Services ◽  
Voluntary Disclosure ◽  
Theoretical Background ◽  
Ownership Concentration ◽  
Annual Reports ◽  
Financial Ratio ◽  
Listed Firms ◽  
Concentrated Ownership ◽  
Audit Firms ◽  
The Relationship

This study examines the relationship between ownership concentration and the extent of financial ratio disclosures (EFRD) in the 2007 annual reports of Australian listed firms. Using agency theory as theoretical background, it is suggested that firms with more concentrated ownership structures are less likely to provide voluntary disclosure of financial ratios information. The univariate tests demonstrate that profitable firms, those firms audited by Big4 auditors and firms belonging to financial services industry communicate more financial ratio information. OLS regressions show that more dispersed shareholding firms‟ are significantly associated with EFRD. Profitable and larger firms audited by independent and Big4 audit firms additionally reported more extensive financial ratio information.

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.

Voluntary information disclosure and sell-side analyst coverage intensity

2017 ◽  
Vol 16 (2) ◽  
pp. 260-280 ◽  
Author(s):  
Amal Hamrouni ◽  
Ramzi Benkraiem ◽  
Majdi Karmani
Keyword(s):  
Voluntary Disclosure ◽  
Information Disclosure ◽  
Stock Exchange ◽  
Annual Reports ◽  
Analyst Coverage ◽  
Content Type ◽  
Corporate Managers ◽  
Financial Firms ◽  
High Level ◽  
The Relationship

Purpose This paper aims to investigate whether a high level of voluntary disclosure attracts sell-side analysts. In other words, the authors check whether the number of analysts following a given firm increases with the extent of voluntary information that corporate managers provide in annual reports. Design/methodology/approach The paper relies on regression analyses to study the relationship between the level of coverage by sell-side analysts and the extent of voluntary disclosure for a sample of 155 non-financial firms listed on the Euronext Paris stock exchange and members of the SBF 250 index. Findings The empirical results show that the number of analysts following a given firm increases with the extent of voluntary disclosure. Consequently, the authors conclude that analysts are interested in the volume of information provided voluntarily by corporate managers. Their interest varies across the voluntary-information categories (strategic, financial, non-financial and governance) disclosed in annual reports. Originality/value This study extends previous research by investigating sell-side analysts’ preferences in terms of voluntary-information categories in annual reports. A better understanding of the effects of sub-categories of voluntary information is useful to corporate managers wishing to meet market expectations and attract sell-side analysts. In fact, the authors verify how each category of disclosed information (strategic, financial, non-financial and governance) affects the analyst coverage intensity. In addition, the authors apply our study in the rather interesting empirical setting that is France, which is characterized by a low investor protection and a large number of active analysts.

scholarly journals Risk disclosure practice in Saudi non-financial listed companies

2017 ◽  
Vol 14 (4) ◽  
pp. 262-275
Author(s):  
Ramzi Alzead ◽  
Khaled Hussainey
Keyword(s):  
Financial Risk ◽  
Stock Exchange ◽  
Saudi Arabian ◽  
Risk Disclosure ◽  
Listed Firms ◽  
Financial Firms ◽  
Developed Nations ◽  
Corporate Risk ◽  
Disclosure Practice ◽  
Risk Reporting

This study makes a valuable contribution to the existing literature on corporate risk disclosure (RD) in emerging economies with a focus on the Saudi Arabian economy in the context of the Middle East. The vast majority of RD literature has placed emphasis on case studies and systems adopted in developed nations. This study undertakes a detailed analysis of RD practices in Saudi Arabian non-financial listed firms by adopting a quantitative approach for the collection and analysis of the datasets using a sample of non-financial firms listed on the Saudi Stock Exchange (Tadawal) over the period of 2010 to 2014. The study adopts a self-constructed unweighted risk disclosure index utilised in the measurement of risk disclosure. The index thus comprises of 11 main categories and a total of 47 sub-items. The main findings show that the average level of (RD) among all the samples is 17%, the maximum is 55%, and 10 firms did not make any RD at all, and of the majority that do, 63% of the information pertains to financial risk disclosure and related risks and the other 37% to non-financial risk disclosure. The trend for RD over the five-year period of study shows that most companies experienced an increase in their risk reporting activity.

scholarly journals Does graphical reporting improve risk disclosure? Evidence from European banks

2018 ◽  
Vol 19 (1) ◽  
pp. 161-180 ◽  
Author(s):  
Michael Jones ◽  
Andrea Melis ◽  
Silvia Gaia ◽  
Simone Aresu
Keyword(s):  
Credit Risk ◽  
Impression Management ◽  
Perspective Taking ◽  
Voluntary Disclosure ◽  
Cognitive Biases ◽  
Annual Reports ◽  
Theory Approach ◽  
Risk Disclosure ◽  
Content Type ◽  
Incremental Information

Purpose The purpose of this paper is to examine the voluntary disclosure of risk-related issues, with a focus on credit risk, in graphical reporting for listed banks in the major European economies. It aims to understand if banks portray credit risk-related information in graphs accurately and whether these graphs provide incremental, rather than replicative, information. It also investigates whether credit risk-related graphs provide a fair representation of risk performance or a more favourable impression than is warranted. Design/methodology/approach A graphical accuracy index was constructed. Incremental information was measured. A multi-level linear model investigated whether credit risk affects the quantity and quality of graphical credit risk disclosure. Findings Banks used credit risk graphs to provide incremental information. They were also selective, with riskier banks less likely to use risk graphs. Banks were accurate in their graphical reporting, particularly those with high levels of credit risk. These findings can be explained within an impression management perspective taking human cognitive biases into account. Preparers of risk graphs seem to prefer selective omission over obfuscation via inaccuracy. This probably reflects the fact that individuals, and by implication annual report’s users, generally judge the provision of inaccurate information more harshly than the omission of unfavourable information. Research limitations/implications This study provides theoretical insights by pointing out the limitations of a purely economics-based agency theory approach to impression management. Practical implications The study suggests annual reports’ readers need to be careful about subtle forms of impression management, such as those exploiting their cognitive bias. Regulatory and professional bodies should develop guidelines to ensure neutral and comparable graphical disclosure. Originality/value This study provides a substantive alternative to the predominant economic perspective on impression management in corporate reporting, by incorporating a psychological perspective taking human cognitive biases into account.

Risk disclosures in annual reports: the role of nonfinancial companies listed on the Athens stock exchange

2021 ◽  
Author(s):  
Fragiskos Gonidakis ◽  
Andreas Koutoupis ◽  
Panagiotis Kyriakogkonas ◽  
Grigorios Lazos
Keyword(s):  
Stock Exchange ◽  
Annual Reports ◽  
Athens Stock Exchange ◽  
Risk Disclosures

IMPACT OF CORPORATE GOVERNANCE ON FIRM PERFORMANCE: EVIDENCE FROM PAKISTAN

2021 ◽  
Vol 02 (01) ◽  
pp. 16-28
Author(s):  
Feryal Zafar ◽  
Shaheera Munir ◽  
Muhammad Saqib Khan
Keyword(s):  
Corporate Governance ◽  
Decision Makers ◽  
Annual Reports ◽  
Board Independence ◽  
Negative Effects ◽  
Research Issues ◽  
Listed Firms ◽  
Analysis Technique ◽  
Dependent Variables ◽  
The Relationship

The study attempts to figure out the relationship between the performance of the firms and corporate governance in Pakistan. Governance mechanisms used in this study are CEO duality, Independence of Board, Size of Board, and Ownership Concentration. While, the ROA and ROE have been used as dependent variables to measure the performance of firms. Using regression analysis technique on 10 listed firms trading over four years from 2014-2017, the results have been derived. The data regarding all the variables have been collected from all the companies’ annual reports. The discoveries of the study direct that fundamentals of corporate governance such as the Size of the Board, Ownership, and Duality Concentration of CEO have negative effects on performance of organization, as measured by ROA and ROE. While Board independence positively affects the performance of firms. The results are thus significant and provide valuable information for the decision makers about the research issues under consideration.

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