Clicca qui per scaricare

Informativeness Assessment of Risk and Risk-Management Disclosure in Corporate Reporting: An Empirical Analysis of Italian Large Listed Firms
Autori/Curatori:  Francesco De Luca, Ho-Tan-Phat Phan 
Anno di pubblicazione:  2019 Fascicolo: 2  Lingua: Inglese 
Numero pagine:  33 P. 9-41 Dimensione file:  164 KB
DOI:  10.3280/FR2019-002002
Il DOI è il codice a barre della proprietà intellettuale: per saperne di più:  clicca qui   qui 

Purpose Risk-related information is prevalently used in the decision-making process by various counterparties. Therefore, this study investigates how compa-nies conduct their risk-disclosure practice after the new Italian Legislative Decree No. 254 of December 30, 2016. In particular, we draw attention to three aspects: (1) the interaction relationship among risk or risk management (RRM), industry, type of risk, and level of specific disclosure; (2) the variation of specific level of disclosing risk-related information across the industries and types of risk; and (3) the different behavior between risk and risk-management disclosure in the after-math of the regulation’s issuance. Design/methodology/approach The study is based on a sample of large un-dertakings and groups that are subject to the Legislative Decree. Two phases of content analysis were executed to analyze the risk and risk-management disclosure. The research questions were investigated with the row effects loglinear model. Findings Our result shows that there are interaction relationships among RRM, type of risk, industry, and level of specific disclosure. Companies provide risk-related information at different levels of specificity depending on whether the information is risk description or risk management, the firms are operating in manu-facturing or nonmanufacturing, and the type of risk that the firms disclosed in their reports. Practical implications The paper provides evidence of inconsistent company behavior in disclosing company-specific information in favor of internal and ex-ternal stakeholders, particularly by balancing company-specific disclosure be-tween risk descriptions and risk-management policies. Policymakers might also consider this current phenomenon to decide to what extent disclosure requirements should be detailed and, instead, what room should be left for management discre-tion with respect to users’ needs. Originality/value This paper is an up-to-date assessment of Italian firms’ compliance with Legislative Decree No. 254 of December 30, 2016.

Keywords: Risk disclosure, risk-management disclosure, level of specific disclosure, nonfinancial information
Jel Code: G38, M48, M14, M40

  1. Abraham S. and Cox P. (2007), Analysing the determinants of narrative risk information in UK FTSE 100 annual reports, The British Accounting Review, 39(3),
  2. Abraham S. and Shrives P.J. (2014), Improving the relevance of risk factor disclosure in corporate annual reports, The British Accounting Review, 46(1), pp. 91-107,
  3. Agresti A. (1984), Analysis of Ordinal Categorical Data. (Hoboken, NJ: John Wiley & Sons).
  4. Agresti A. (2013), Categorical Data Analysis (3rd ed.). (Hoboken, NJ: John Wiley & Sons).
  5. Ahmed K. and Courtis J.K. (1999), Association between corporate characteristics and disclosure levels in annual reports: A meta analysis, British Accounting Review, 31(1), pp. 35-61,
  6. Al‐Hadi A., Hasan M.M. and Habib A. (2016), Risk Committee, Firm Life Cycle, and Market Risk Disclosures, Corporate Governance: An International Review, 24(2), pp. 145-170,
  7. Belkaoui A. and Karpik P.G. (1989), Determinants of the corporate decision to disclose social information, Accounting, Auditing and Accountability Journal, 2(1), pp. 36-51,, DOI: 10.1108/09513578910132240
  8. Beretta S. and Bozzolan S. (2004), A framework for the analysis of firm risk communication, The International Journal of Accounting, 39(3), pp. 265-288,
  9. Bini L., Bellucci M. and Giunta F. (2016), Put your money where your mouth is: The difference between real commitment to sustainability and mere rhetoric, Financial Reporting, pp. 5-31,, DOI: 10.3280/FR2016-002001
  10. Bowman E.H. (1984), Content analysis of annual reports for corporate strategy and risk, Interfaces, 14(1), pp. 61-71,
  11. Campbell J.L., Chen H., Dhaliwal D.S., Lu H.M. and Steele L.B. (2014), The information content of mandatory risk factor disclosures in corporate filings, Review of Accounting Studies, 19(1), pp. 396-455,
  12. Cole F. (1988), Content analysis: process and application, Clinical Nurse Specialist, 2(1), pp. 53-57,, DOI: 10.1097/00002800-198800210-00025
  13. Combes E.T., Henneron S. and Touron P. (2006), Risk regulations and financial disclosure – an investigation based on corporate communication in French traded companies, Corporate Communications: An International Journal, 11(3), pp. 303-26,, DOI: 10.1108/13563280610680876
  14. Cooke T.E. (1992), The impact of size, stock market listing and industry type on disclosure in the annual report of Japanese listed corporations, Accounting and Business Research, 22(87), pp. 229-237,, DOI: 10.1080/00014788.1992.9729440
  15. Cordazzo M., Papa M. and Rossi P. (2017), The interaction between mandatory and voluntary risk disclosure: a comparative study, Managerial Auditing Journal, 32(7), pp. 682-714,, DOI: 10.1108/MAJ-01-2016-1308
  16. Deumesa R. and Knechel W.R. (2008), Economic Incentives for Voluntary Reporting on Internal Risk Management and Control Systems, AUDITING: A Journal of Practice & Theory, 27(1), pp. 35-66,
  17. Dobler M. (2008), Incentives for risk reporting – a discretionary disclosure and cheap talk approach, The International Journal of Accounting, 43(2), pp. 184-206,
  18. Elshandidy T. and Neri L. (2015), Corporate Governance, Risk Disclosure Practices, and Market Liquidity: Comparative Evidence from the UK and Italy, Corporate Governance: An International Review, 23(4), pp. 331-356,
  19. Elshandidy T., Shrives P.J., Bamber M. and Abraham S. (2018), Risk reporting: A review of the literature and implications for future research, Journal of Accounting Literature, 40, pp. 54-82,
  20. Elzahar H. and Hussainey K. (2012), Determinants of narrative risk disclosures in UK interim reports, The Journal of Risk Finance, 13(2), pp. 133-147,, DOI: 10.1108/15265941211203189
  21. Girella L., Abela M. and Ferrari E. R. (2018), Conceptual shifts in accounting: transplanting the notion of boundary from financial to non-financial reporting, Financial Reporting, pp. 133-175,, DOI: 10.3280/FR2018-001005
  22. Greco G. (2012), The management’s reaction to new mandatory risk disclosure: A longitudinal study on Italian listed companies, Corporate Communications: An International Journal, 17(2), pp. 113-137,, DOI: 10.1108/13563281211220256
  23. Hope O.-K., Hu D. and Lu H. (2016), The benefits of specific risk-factor disclosures, Review of Accounting Studies, 21(4), pp. 1005-1045,
  24. Howell D.C. (2010). Statistical methods for psychology (7th ed.). (Belmont CA: Wadsworth Cengage Learning).
  25. ICAEW, The Institute of Chartered Accountants in England and Wales (1997), Financial Reporting of Risk: Proposals for a Statement of Business Risk, ICAEW, UK.
  26. ICAEW (2016), Materiality in assuring narrative reporting. Audit and Assurance, The Journey: Milestone 4.
  27. Jain A., Mondal A. and Ghosh R. (2018), Methods and systems for analyzing financial risk factors for companies within an industry, Patent Application Publication.
  28. Kakanda M.M., Salim B. and Chandren S. (2017), Corporate governance reform and risk management disclosures: Evidence from Nigeria, Business and Economic Horizons, 13(3), pp. 357-367,
  29. Kazlauskienė V. and Christauskas C. (2007), Risk Reflection in Business Valuation Methodology, Engineering Economics, 1(51), pp. 7-15.
  30. Lai A., Melloni G. and Stacchezzini R. (2018), Integrated reporting and narrative accountability: The role of preparers, Accounting, Auditing & Accountability Journal, 31(5), pp.1381-1405,, DOI: 10.1108/AAAJ-08-2016-2674
  31. Linsley P.M. and Shrives P.J. (2006), Risk reporting: A study of risk disclosures in the annual reports of UK companies, The British Accounting Review, 38(4), pp. 387-404,
  32. Lofstedt R., Bouder F., Wardman J. and Chakraborty S. (2011), The changing nature of communication and regulation of risk in Europe, Journal of Risk Research, 14(4), pp. 409-29,, DOI: 10.1080/13669877.2011.557479
  33. Maffei M., Aria M., Fiondella C., Spanò R. and Zagaria C. (2014), (Un)useful risk disclosure: Explanations from the Italian banks, Managerial Auditing Journal, 29(7), pp. 621-648,, DOI: 10.1108/MAJ-11-2013-0964
  34. Manes-Rossi F., Nicolò G. and Levy Orelli R. (2017), Reshaping Risk Disclosure through Integrated Reporting: Evidence from Italian Early Adopters, International Journal of Business and Management, 12(10), pp. 11-23,
  35. Marshall A. and Weetman P. (2007), Modelling Transparency in Disclosure: The Case of Foreign Exchange Risk Management. Journal of Business Finance & Accounting, 34(5), pp. 705-739.
  36. Meyer J.W. and Rowan B. (1977), Institutionalized organizations: Formal structure as myth and ceremony, American Journal of Sociology, 83(2), pp. 340-363,, DOI: 10.1086/226550
  37. Miihkinen A. (2012), What Drives Quality of Firm Risk Disclosure? The Impact of a National Disclosure Standard and Reporting Incentives under IFRS, The International Journal of Accounting, 47(4), pp. 437-468,
  38. Potter W. and Levine-Donnerstein D. (1999), Rethinking Validity and Reliability in Content Analysis, Journal of Applied Communication Research, 27(3), pp. 258-284,, DOI: 10.1080/00909889909365539
  39. Protiviti (2011), Risk Identification Tool, Spring Conference 2011 (p. 1-9), Altamonte Springs: The Institute of Internal Auditors.
  40. Robb S.W., Single L.E. and Zarzeski M.T. (2001), Nonfinancial disclosures across Anglo-American countries, Journal of International Accounting, Auditing and Taxation, 10(1), pp. 71-83,, DOI: 10.1016/S1061-9518(01)00036-2
  41. Roberts C., Weetman P. and Gordon P. (2008), International Financial Reporting – A Comparative Approach (3rd ed.). (Essex: Pearson Education).
  42. Roulstone D.T. (1999), Effect of SEC Financial Reporting Release No. 48 on Derivative and Market Risk Disclosures, Accounting Horizons, 13(4), pp. 343-363,
  43. Selznick P. (1948), Foundations of the Theory of Organization, American Sociological Review, 13(1), pp. 22-35,, DOI: 10.2307/2086752
  44. Shevlin T. (2004), Discussion of “A framework for the analysis of firm risk communication”, The International Journal of Accounting, 39, pp. 297-302,
  45. Tabachnick B.G. and Fidell L.S. (2012), Using multivariate statistics. (Boston: Pearson).
  46. Verrecchia R.E. (1983), Discretionary disclosure, Journal of Accounting and Economics, 5, pp. 179-194,, DOI: 10.1016/0165-4101(83)90011-3
  47. Wagenhofer A. (1990), Voluntary disclosure with a strategic opponent, Journal of Accounting and Economics, 12(4), pp. 341-363,, DOI: 10.1016/0165-4101(90)90020-5

  1. Stefania Veltri, Mandatory Non-financial Risk-Related Disclosure pp. 3 (ISBN:978-3-030-47920-6)
  2. Stefania Veltri, Mandatory Non-financial Risk-Related Disclosure pp. 89 (ISBN:978-3-030-47920-6)
  3. Stefania Veltri, Mandatory Non-financial Risk-Related Disclosure pp. 133 (ISBN:978-3-030-47920-6)
  4. Ho-Tan-Phat Phan, Francesco De Luca, Lea Iaia, The “Walk” towards the UN Sustainable Development Goals: Does Mandated “Talk” through NonFinancial Disclosure Affect Companies’ Financial Performance? in Sustainability /2020 pp. 2324, DOI: 10.3390/su12062324
  5. Stefania Veltri, Mandatory Non-financial Risk-Related Disclosure pp. 57 (ISBN:978-3-030-47920-6)
  6. Stefania Veltri, Mandatory Non-financial Risk-Related Disclosure pp. 31 (ISBN:978-3-030-47920-6)
  7. Anca Băndoi, Claudiu George Bocean, Mara Del Baldo, Lucian Mandache, Leonardo Geo Mănescu, Cătălina Soriana Sitnikov, Including Sustainable Reporting Practices in Corporate Management Reports: Assessing the Impact of Transparency on Economic Performance in Sustainability /2021 pp. 940, DOI: 10.3390/su13020940

Francesco De Luca, Ho-Tan-Phat Phan, in "FINANCIAL REPORTING" 2/2019, pp. 9-41, DOI:10.3280/FR2019-002002


FrancoAngeli è membro della Publishers International Linking Association associazione indipendente e no profit per facilitare l'accesso degli studiosi ai contenuti digitali nelle pubblicazioni professionali e scientifiche