Risk‐related disclosures by non‐finance companies

Abstract

Some theories, as agency theory or signalling theory raised the problem related with the information asymmetry between the shareholders and the managers. One way of reducing this asymmetry is to pressure the companies to disclose more risk-related information. In our research we try to determine the risk reporting practices among Portuguese non-financial companies. For this purpose a content analysis of 81 individual and consolidated annual reports, from the year 2005, of Portuguese companies listed on the Eurolist Lisbon stock exchange market, and on the un-regulated market and not listed companies was made. We concluded that managers, at the time of reporting information about risk, adopt strategies of "impression management" consistent with the attribution theory. We also conclude that almost all of the information disclosed was generic, qualitative and backward-looking, expressing a gap between the risk reporting practices and the usefulness of this kind of information.Therefore, this study is relevant for risk disclosure regulation.

Risk Disclosure Analysis in the Corporate Governance Annual Report Using Fuzzy-Set Qualitative Comparative Analysis

“…Although some results do not corroborate this relationship, e.g., Barako et al (2006), several empirical studies (Cabedo & Tirado, 2009;Gul & Leung, 2004;Oliveira et al, 2011;Domínguez-de la Concha & Cauzo Bottala, 2015) and the meta-results reported by Garcia-Meca and Sanchez-Ballesta (2010) confirm that board independence is positively related with voluntary disclosure.…”

“…Giner (1997), Deumes and Knechel (2008) and Oliveira et al (2011) found that financial statements supervised by the Big Auditing …”

“…The lack of proper risk disclosure helped to boost and amplify the current financial crisis (Kothari & Lester, 2012), but this has changed to some extent. This paper builds on the CG literature that explores the impact of good governance mechanisms on the quality of financial information (Carcello & Neal, 2003;Pomeroy & Thornton, 2008;Pucheta-Martinez & Fuentes, 2007;Pucheta-Martinez & GarciaMeca, 2014) and risk disclosure (Cabedo & Tirado, 2004Deumes & Knekel, 2008;Linsley & Shrives, 2006;Oliveira, Rodrigues, & Craig, 2011;Domínguez & Gámez, 2014).…”

A divulgação do risco nas demonstrações financeiras: uma análise ao anexo das sociedades não financeiras portuguesas

“…A maior parte dos estudos efetuados sobre a divulgação do risco baseia-se em evidências empíri-cas a partir de regulamentações de origem anglo-saxónicas (Abraham & Cox, 2007;Deumes & Knechel, 2008;Lajili & Zéghal, 2005;Linsley & Shrives, 2006;Oliveira, Rodrigues & Craig, 2011a), bem como no âmbito dos países continentais (Beretta & Bozzolan, 2004).…”

“…Uma das possíveis classificações relativas ao risco serve à análise entre a quantidade de informação numérica/quantitativa e a informação não numérica/qualitativa divulgada pelas entidades nesse âmbito, suportando-se tais estudos na hipótese de que as entidades divulgam mais informação de natureza estritamente qualitativa, comparativamente com a informação de natureza quantitativa (Beretta & Bozzolan, 2004;Lajili & Zéghal, 2005;Linsley & Shrives, 2006;Oliveira et al, 2011a).…”