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Corporate communication of financial risk

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  • Grantley Taylor
  • Greg Tower
  • John Neilson

Abstract

This study provides insights on the Financial Risk Management Disclosure (FRMD) patterns of Australian listed resource companies for the 2002–2006 period leading up to and immediately following adoption of the International Financial Reporting Standards (IFRS). Regression analysis demonstrates that corporate governance and capital raisings of firms are significant and positively associated with FRMD patterns. In contrast, overseas stock exchange listing of firms is significantly negatively associated with FRMD patterns. The findings show that the introduction of IFRS changes corporation’s willingness to communicate risk information.

Suggested Citation

  • Grantley Taylor & Greg Tower & John Neilson, 2010. "Corporate communication of financial risk," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 50(2), pages 417-446, June.
    • Handle: RePEc:bla:acctfi:v:50:y:2010:i:2:p:417-446
    DOI: 10.1111/j.1467-629X.2009.00326.x
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    3. Miihkinen, Antti, 2013. "The usefulness of firm risk disclosures under different firm riskiness, investor-interest, and market conditions: New evidence from Finland," Advances in accounting, Elsevier, vol. 29(2), pages 312-331.
    4. KIM, Hyonok & YASUDA, Yukihiro & 安田, 行宏, 2016. "Mandatory adoption of business risk disclosure: evidence from Japanese firms," Working Paper Series G-1-14, Hitotsubashi University Center for Financial Research.
    5. 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.
    6. 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.
    7. Agung Nur Probohudono & Bambang Sugiharto & Siti Arifah, 2019. "The Influence Of Corporate Governance, Audit Quality, And Ownership, On Financial Instrument Disclosure In Indonesia," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 1(3), pages 173-187, May.
    8. 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).
    9. Malaquias, Rodrigo Fernandes & Zambra, Pablo, 2018. "Disclosure of financial instruments: Practices and challenges of Latin American firms from the mining industry," Research in International Business and Finance, Elsevier, vol. 45(C), pages 158-167.
    10. Hossein Tarighi & Zeynab Nourbakhsh Hosseiny & Maryam Akbari & Elaheh Mohammadhosseini, 2023. "The Moderating Effect of the COVID-19 Pandemic on the Relation between Corporate Governance and Firm Performance," JRFM, MDPI, vol. 16(7), pages 1-43, June.
    11. Jia, Jing & Li, Zhongtian, 2022. "Risk management committees and readability of risk management disclosure," Journal of Contemporary Accounting and Economics, Elsevier, vol. 18(3).
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    13. Roslyn Roberts & Daun Jang & Grace Mubako, 2023. "Pandemic risk disclosure in integrated reports: after COVID‐19 is hindsight 2020?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 1739-1758, June.
    14. Elshandidy, Tamer & Acheampong, Albert, 2021. "Does hedge disclosure influence cost of capital for European banks?," International Review of Financial Analysis, Elsevier, vol. 78(C).

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