The Impact of Audit Committee Composition on Corporate Risk Disclosure in Emerging Countries

The study examines corporate risk disclosure and the audit committee’s effect on corporate risk disclosure in emerging African economies. The study analyzes 42 financial and non-financial firms listed on the Nigerian and Johannesburg stock exchanges. We use manual content analysis to ascertain the risk information reported by firms. Besides, we use the regression method to ascertain the relationship between audit committee composition and corporate risk disclosures. According to the findings, operational risks are more frequently disclosed by firms than strategic and environmental risks. However, the greater visibility of non-monetary risk information, as well as historical and positive news, has diminished the importance of risk information, as monetary, future, and negative news are increasingly important for stakeholders’ decision-making. Moreover, the results indicate that the audit committee size is negatively connected with corporate risk disclosure, implying that risk disclosure practices decrease as people in the audit committee increases. Additionally, an audit committee composes of a greater number of independent directors, as well as an audit committee chairs by an independent director, tends to encourage firms to disclose additional risk information. In contrast, the risk disclosure policies are unaffected by the presence of non-executive members on the committee or the frequency with which members meet.