IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v8y2024i12p445-454.html
   My bibliography  Save this article

Conceptualizing the Risk Disclosure Relationship to Ownership Structure and Board Characteristics with Competitive Position and Audit Quality as Interaction Effects

Author

Listed:
  • Hendri Setyawan

    (Universitas Islam Sultan Agung, Semarang, Indonesia)

  • Nor Balkish Zakaria

    (Accounting Research Institute, Universiti Teknologi MARA, Malaysia)

  • Yvonne Joseph Ason

    (Universiti Teknologi MARA, Sabah, Malaysia)

Abstract

This study conceptualizes the relationship between ownership structure, board characteristics, and risk disclosure, with competitive position and audit quality as moderating factors. Focusing on emerging ASEAN markets, the paper synthesizes theoretical perspectives and empirical evidence from Malaysia’s plantation sector, Indonesia’s banking sector, and Vietnam’s manufacturing industry to explore how governance attributes influence risk reporting practices. The findings highlight that ownership concentration and weak governance structures limit voluntary disclosures, whereas independent boards, institutional ownership, and high audit quality enhance transparency and reliability. Competitive pressures are shown to restrict disclosures in highly competitive industries, although robust governance and audit mechanisms mitigate these effects. The study contributes to corporate governance and risk disclosure literature by presenting a thematic analysis of these factors and provides practical insights for policymakers, regulators, and corporate stakeholders. This framework aims to advance theoretical understanding and inform strategies for improving transparency in emerging markets.

Suggested Citation

  • Hendri Setyawan & Nor Balkish Zakaria & Yvonne Joseph Ason, 2024. "Conceptualizing the Risk Disclosure Relationship to Ownership Structure and Board Characteristics with Competitive Position and Audit Quality as Interaction Effects," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(12), pages 445-454, December.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:12:p:445-454
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-8-issue-12/445-454.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/conceptualizing-the-risk-disclosure-relationship-to-ownership-structure-and-board-characteristics-with-competitive-position-and-audit-quality-as-interaction-effects/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ntim, Collins G. & Lindop, Sarah & Thomas, Dennis A., 2013. "Corporate governance and risk reporting in South Africa: A study of corporate risk disclosures in the pre- and post-2007/2008 global financial crisis periods," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 363-383.
    2. J.David Cabedo & José Miguel Tirado, 2004. "The disclosure of risk in financial statements," Accounting Forum, Taylor & Francis Journals, vol. 28(2), pages 181-200, June.
    3. Linsley, Philip M. & Shrives, Philip J., 2006. "Risk reporting: A study of risk disclosures in the annual reports of UK companies," The British Accounting Review, Elsevier, vol. 38(4), pages 387-404.
    4. Ibrahim, Awad Elsayed Awad & Hussainey, Khaled, 2019. "Developing the narrative risk disclosure measurement," International Review of Financial Analysis, Elsevier, vol. 64(C), pages 126-144.
    5. Issal Haj Salem & Salma Damak Ayadi & Khaled Hussainey, 2019. "Corporate governance and risk disclosure quality: Tunisian evidence," Journal of Accounting in Emerging Economies, Emerald Group Publishing Limited, vol. 9(4), pages 567-602, August.
    6. Stuart Mcchlery & Khaled Hussainey, 2021. "Risk disclosure behaviour: evidence from the UK extractive industry," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 22(3), pages 484-506, February.
    7. Shamsun Nahar & Mohammad Istiaq Azim & Md Moazzem Hossain, 2020. "Risk disclosure and risk governance characteristics: evidence from a developing economy," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 28(4), pages 577-605, April.
    8. Abraham, Santhosh & Cox, Paul, 2007. "Analysing the determinants of narrative risk information in UK FTSE 100 annual reports," The British Accounting Review, Elsevier, vol. 39(3), pages 227-248.
    9. Beretta, Sergio & Bozzolan, Saverio, 2004. "A framework for the analysis of firm risk communication," The International Journal of Accounting, Elsevier, vol. 39(3), pages 265-288.
    10. Ben Le & Paula Hearn Moore, 2021. "The impact of audit quality on earnings management and cost of equity capital: evidence from a developing market," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 21(3), pages 695-728, December.
    11. Rihab Grassa & Nejia Moumen & M. Kabir Hassan & Khaled Hussainey, 2022. "Market discipline and capital buffers in Islamic and conventional banks in the MENA region," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 12(1), pages 139-167, March.
    12. Roger Harrington, 2012. "Discussion of ‘Financial instruments in non-financial firms: what do we know?’ by Günther Gebhardt (2012)," Accounting and Business Research, Taylor & Francis Journals, vol. 42(3), pages 291-293, August.
    13. Beretta, Sergio & Bozzolan, Saverio, 2004. "Reply to: Discussions of "A framework for the analysis of firm risk communication"," The International Journal of Accounting, Elsevier, vol. 39(3), pages 303-305.
    14. Tamer Elshandidy & Philip J. Shrives & Matt Bamber & Santhosh Abraham, 2018. "Risk reporting: A review of the literature and implications for future research✩," Journal of Accounting Literature, Emerald Group Publishing Limited, vol. 40(1), pages 54-82, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vitolla, Filippo & Raimo, Nicola & Campobasso, Francesco & Giakoumelou, Anastasia, 2023. "Risk disclosure in sustainability reports: Empirical evidence from the energy sector," Utilities Policy, Elsevier, vol. 82(C).
    2. Ibrahim, Awad Elsayed Awad & Hussainey, Khaled & Nawaz, Tasawar & Ntim, Collins & Elamer, Ahmed, 2022. "A systematic literature review on risk disclosure research: State-of-the-art and future research agenda," International Review of Financial Analysis, Elsevier, vol. 82(C).
    3. M. V. Shivaani, 2018. "Does Regulatory Flexibility Affect Risk Disclosures in Annual Report?," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 19(4), pages 321-336, December.
    4. Chandni Khandelwal & Satish Kumar & Riya Sureka, 2022. "Mapping the intellectual structure of corporate risk reporting research: a bibliometric analysis," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 19(2), pages 129-143, June.
    5. Nadezda Gulko & Catriona Hyde & Nina Seppala, 2017. "Disclosure of corporate risks and governance before, during and after the global financial crisis: case study in the UK construction industry in 2006–2009," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 14(3), pages 207-223, August.
    6. Shivaani, M.V. & Agarwal, Nishant, 2020. "Does competitive position of a firm affect the quality of risk disclosure?," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    7. Ridhima Saggar & Balwinder Singh, 2019. "Drivers of Corporate Risk Disclosure in Indian Non-financial Companies: A Longitudinal Approach," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 44(3), pages 303-325, August.
    8. Rihab Grassa & Nejia Moumen & Khaled Hussainey, 2021. "What drives risk disclosure in Islamic and conventional banks? An international comparison," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6338-6361, October.
    9. Ntim, Collins G., 2016. "Corporate governance, corporate health accounting, and firm value: The case of HIV/AIDS disclosures in Sub-Saharan Africa," The International Journal of Accounting, Elsevier, vol. 51(2), pages 155-216.
    10. Ahmed A. Elamer & Collins G. Ntim & Hussein A. Abdou & Alaa Mansour Zalata & Mohamed Elmagrhi, 2019. "The impact of multi-layer governance on bank risk disclosure in emerging markets: the case of Middle East and North Africa," Accounting Forum, Taylor & Francis Journals, vol. 43(2), pages 246-281, April.
    11. Grassa, Rihab & Moumen, Nejia & Hussainey, Khaled, 2020. "Is bank creditworthiness associated with risk disclosure behavior? Evidence from Islamic and conventional banks in emerging countries," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    12. Francisco Bravo, 2018. "Does board diversity matter in the disclosure process? An analysis of the association between diversity and the disclosure of information on risks," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 15(2), pages 104-114, May.
    13. Rossella Leopizzi & Antonio Iazzi & Andrea Venturelli & Salvatore Principale, 2020. "Nonfinancial risk disclosure: The “state of the art” of Italian companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(1), pages 358-368, January.
    14. Düsterhöft, Maximilian & Schiemann, Frank & Walther, Thomas, 2023. "Let’s talk about risk! Stock market effects of risk disclosure for European energy utilities," Energy Economics, Elsevier, vol. 125(C).
    15. Moumen, Néjia & Ben Othman, Hakim & Hussainey, Khaled, 2016. "Board structure and the informativeness of risk disclosure: Evidence from MENA emerging markets," Advances in accounting, Elsevier, vol. 35(C), pages 82-97.
    16. Tariq H. Ismail & Yousra R. Obiedallah, 2022. "Firm performance and cost of equity capital: the moderating role of narrative risk disclosure quality in Egypt," Future Business Journal, Springer, vol. 8(1), pages 1-19, December.
    17. Salem Boumediene & Fatma Ezzahra Abdallah & Salma Ben Moussa & Emna Boumediene, 2022. "Internal Corporate Governance Mechanisms And Risk Disclosure: Evidence From Tunisia," Accounting & Taxation, The Institute for Business and Finance Research, vol. 14(1), pages 15-30.
    18. Alessandra Allini & Francesca Manes Rossi & Khaled Hussainey, 2016. "The board's role in risk disclosure: an exploratory study of Italian listed state-owned enterprises," Public Money & Management, Taylor & Francis Journals, vol. 36(2), pages 113-120, March.
    19. Khandelwal, Chandni & Kumar, Satish & Madhavan, Vinodh & Pandey, Nitesh, 2020. "Do board characteristics impact corporate risk disclosures? The Indian experience," Journal of Business Research, Elsevier, vol. 121(C), pages 103-111.
    20. Lorenzo Neri & Antonella Russo, 2013. "Risk Disclosures in the Annual Reports of Italian Listed Companies," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2013(3-4), pages 141-168.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:8:y:2024:i:12:p:445-454. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.