Firms' Risk Disclosure and Reporting: A Comprehensive Framework

Objective: increasing complexity and competitive in business has led to emphasize on organizations to provide a higher volume and more qualitative information in order to promote transparency and reduce information asymmetries. These changes have meant that the usefulness of the information provided...

Descripción completa

Guardado en:

Detalles Bibliográficos
Autores principales:	Mohammad Namazi, Mehdi Ebrahimi Maimand
Formato:	article
Lenguaje:	FA
Publicado:	Shahid Bahonar University of Kerman 2021
Materias:	risk disclosure risk reporting framework qualitative characteristics of information stakeholder Accounting. Bookkeeping HF5601-5689
Acceso en línea:	https://doaj.org/article/3ad166e79dcc44c8ab88a198023f7702
Etiquetas:	Agregar Etiqueta Sin Etiquetas, Sea el primero en etiquetar este registro!

id	oai:doaj.org-article:3ad166e79dcc44c8ab88a198023f7702
record_format	dspace
spelling	oai:doaj.org-article:3ad166e79dcc44c8ab88a198023f77022021-11-04T19:57:21ZFirms' Risk Disclosure and Reporting: A Comprehensive Framework2008-89142476-292X10.22103/jak.2021.16194.3294https://doaj.org/article/3ad166e79dcc44c8ab88a198023f77022021-07-01T00:00:00Zhttps://jak.uk.ac.ir/article_2886_74dbf7f17d3b9839418179dd58ec624a.pdfhttps://doaj.org/toc/2008-8914https://doaj.org/toc/2476-292XObjective: increasing complexity and competitive in business has led to emphasize on organizations to provide a higher volume and more qualitative information in order to promote transparency and reduce information asymmetries. These changes have meant that the usefulness of the information provided by the traditional financial statements to their potential users becoming less and less valuable, leading to a higher demand of relevant information and an effort by standard regulators to improve quality and timeliness of the information. Risk information play an important role in the decision-making process and evaluation of the company. In this sense, the information about risks can contribute to manage changes, reduce the cost of capital, report on the future path of the business model, and allow companies to communicate the risk messages that they wholly understand their own risks and have developed practices to manage them. In addition, information about risk helps investors to valuation of the firms and in the assessment of management's work. Accordingly, this study explores establishing a theoretical and comprehensive framework for risk disclosure for the firms listed in Tehran Stock Exchange (TSE), and determines various risks empirically. Method: For this purpose, a quantitative survey research methodology was exerted, and the attitude of auditors, academics, and financial analysts, towards the framework for risk disclosure were investigated. Required data were obtained by questioner from sample of 203 preceding individuals in 2016, 2017 and analyzed by using comparative, T test, Wilcoxon, and Friedman tests. Results: Results showed that risks information need to be provided to different stakeholders including investors, financial analysts, creditors, government, managers, suppliers resources (non-financial) and customers. The purpose of providing this information should be aimed at assisting decision making and disclosure of risks information must be mandatory. Qualitative characteristics of risk disclosure including relevancy, reliability, comparability, understandability, and materiality and costs- benefits should also be determined. In regard to qualitative or quantitative risk disclosures, a concise and approved guideline is required for quantitative disclosure and different quantification techniques to risk disclosures also required. In addition, for assimilation of risk information, forward-looking and backward- looking and negative and positive information about risk must be considered with focusing on negative and forward-looking information. Conclusion: According to research findings, all types of risk, including financial, strategic, operational, integrity and empowerment are required and must be prioritized according to their importance and impact. This research identifies a number of issues for regulator and standard setter to establish requirements for risk disclosure. In addition, the findings can be used by professional associations to provide suggestions for risk disclosure.Mohammad NamaziMehdi Ebrahimi MaimandShahid Bahonar University of Kermanarticlerisk disclosurerisk reporting frameworkqualitative characteristics of informationstakeholderAccounting. BookkeepingHF5601-5689FAمجله دانش حسابداری, Vol 12, Iss 2, Pp 1-27 (2021)
institution	DOAJ
collection	DOAJ
language	FA
topic	risk disclosure risk reporting framework qualitative characteristics of information stakeholder Accounting. Bookkeeping HF5601-5689
spellingShingle	risk disclosure risk reporting framework qualitative characteristics of information stakeholder Accounting. Bookkeeping HF5601-5689 Mohammad Namazi Mehdi Ebrahimi Maimand Firms' Risk Disclosure and Reporting: A Comprehensive Framework
description	Objective: increasing complexity and competitive in business has led to emphasize on organizations to provide a higher volume and more qualitative information in order to promote transparency and reduce information asymmetries. These changes have meant that the usefulness of the information provided by the traditional financial statements to their potential users becoming less and less valuable, leading to a higher demand of relevant information and an effort by standard regulators to improve quality and timeliness of the information. Risk information play an important role in the decision-making process and evaluation of the company. In this sense, the information about risks can contribute to manage changes, reduce the cost of capital, report on the future path of the business model, and allow companies to communicate the risk messages that they wholly understand their own risks and have developed practices to manage them. In addition, information about risk helps investors to valuation of the firms and in the assessment of management's work. Accordingly, this study explores establishing a theoretical and comprehensive framework for risk disclosure for the firms listed in Tehran Stock Exchange (TSE), and determines various risks empirically. Method: For this purpose, a quantitative survey research methodology was exerted, and the attitude of auditors, academics, and financial analysts, towards the framework for risk disclosure were investigated. Required data were obtained by questioner from sample of 203 preceding individuals in 2016, 2017 and analyzed by using comparative, T test, Wilcoxon, and Friedman tests. Results: Results showed that risks information need to be provided to different stakeholders including investors, financial analysts, creditors, government, managers, suppliers resources (non-financial) and customers. The purpose of providing this information should be aimed at assisting decision making and disclosure of risks information must be mandatory. Qualitative characteristics of risk disclosure including relevancy, reliability, comparability, understandability, and materiality and costs- benefits should also be determined. In regard to qualitative or quantitative risk disclosures, a concise and approved guideline is required for quantitative disclosure and different quantification techniques to risk disclosures also required. In addition, for assimilation of risk information, forward-looking and backward- looking and negative and positive information about risk must be considered with focusing on negative and forward-looking information. Conclusion: According to research findings, all types of risk, including financial, strategic, operational, integrity and empowerment are required and must be prioritized according to their importance and impact. This research identifies a number of issues for regulator and standard setter to establish requirements for risk disclosure. In addition, the findings can be used by professional associations to provide suggestions for risk disclosure.
format	article
author	Mohammad Namazi Mehdi Ebrahimi Maimand
author_facet	Mohammad Namazi Mehdi Ebrahimi Maimand
author_sort	Mohammad Namazi
title	Firms' Risk Disclosure and Reporting: A Comprehensive Framework
title_short	Firms' Risk Disclosure and Reporting: A Comprehensive Framework
title_full	Firms' Risk Disclosure and Reporting: A Comprehensive Framework
title_fullStr	Firms' Risk Disclosure and Reporting: A Comprehensive Framework
title_full_unstemmed	Firms' Risk Disclosure and Reporting: A Comprehensive Framework
title_sort	firms' risk disclosure and reporting: a comprehensive framework
publisher	Shahid Bahonar University of Kerman
publishDate	2021
url	https://doaj.org/article/3ad166e79dcc44c8ab88a198023f7702
work_keys_str_mv	AT mohammadnamazi firmsriskdisclosureandreportingacomprehensiveframework AT mehdiebrahimimaimand firmsriskdisclosureandreportingacomprehensiveframework
_version_	1718444584763129856

Firms' Risk Disclosure and Reporting: A Comprehensive Framework

Ejemplares similares