21 research outputs found
Determinants and impacts of risk disclosure quality: evidence from China
Purpose
Few studies have focused on emerging markets owing to difficulties in identifying the real effect of disclosures on these economies. To fill this gap, this paper investigates the main drivers for risk disclosure quality for Chinese financial firms, and further studies the impact of such disclosure on market liquidity.
Design/methodology/approach
The sample comprises all financial firms listed in the Shanghai A-shares market for the period 2013-2015. By relying on manual content analysis of annual reports, the risk disclosure quality is measured through a multidimensional approach which encompasses three factors: quantity of disclosure, coverage of disclosure, and the semantic properties of depth and outlook. The findings of this paper are based on ordinary least squares (OLS) and fixed-effects estimations.
Findings
Our findings suggest that firm characteristics (especially size) influence risk disclosure practices of Chinese financial companies. Furthermore, we found that risk disclosure quality has an impact on market liquidity, and when we analysed each year we noticed that the results were driven by the year 2013; moreover, we noticed no or little significance from the period of the emerging financial crisis.
Research limitations/implications
The sample of this paper is limited to financial firms in China. The usage of manual content analysis limits our ability to investigate risk reporting drivers and its impact on market liquidity on a large scale.
Practical implications
The importance of this paper stems from documenting several reporting incentives concerning not only firmsâ quantity, but also firmsâ quality of risk reporting. Collectively, our findings support activism for reforms and the enhancement of regulations in China in order to make the market more efficient.
Originality/value
This paper provides new evidence for financial companies in China on the principal drivers for risk disclosure quality and highlights how the quality of such disclosure impacts market liquidity. Furthermore, this paper confirms previous findings on the Chinese market (Ball et al., 2000; Zou and Adams, 2008) in which, given a decreasing but still strong state presence, there is higher stock volatility and weak corporate governance
The value relevance of risk-related disclosure : does the tone of disclosure matter?
202202 bcvcVersion of RecordNot mentionEarly releas
Do IFRS and board of directorsâ independence affect accounting conservatism?
This article observes separately and jointly the impact of international financial
reporting standards (IFRS) and/or board of directorsâ independence on accounting
conservatismin FTSE 100 nonfinancial firms between 2002 and 2007. Using Givoly
and Haynâs (2000) accrual-based measure of accounting conservatism, we found a
reduction in conservatismafter themandatory adoption of IFRS, and, also, that board
of directorsâ independence improved accounting conservatism. Moreover, IFRS and
board of directorsâ independence had a complementary impact on accounting conservatism
since the role of independent directors was not observable prior to the
mandatory adoption of IFRS. Our results suggest that, after the mandatory adoption
of IFRS, independent directors are likely to put significantly more pressure on the
management to practice more accounting conservatism