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 Table of contents

1. Determinants of narrative risk disclosures in UK interim reports.................................................................. 1

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Document 1 of 1

Determinants of narrative risk disclosures in UK interim reports

Author: Elzahar, Hany; Hussainey, Khaled

Publication info: The Journal of Risk Finance 13.2 (2012): 133-147.

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Abstract: Purpose - The purpose of this paper is to contribute to the existing disclosure literature by examining
the determinants of narrative risk information in the interim reports for a sample of UK non-financial companies.
Design/methodology/approach - This study uses the manual content analysis to measure the level of risk
information in interim report narrative sections prepared by 72 UK companies. It also uses the ordinary least
squares regression analysis to examine the impact of firm-specific characteristics and corporate governance
mechanisms on narrative risk disclosures. Findings - The empirical analysis shows that large firms are more
likely to disclose more risk information in the narrative sections of interim reports. In addition, the analysis
shows that industry activity type is positively associated with levels of narrative risk disclosure in interim reports.
Finally, the analysis shows statistically insignificant impact of other firm-specific characteristics (liquidity,
gearing, profitability, and cross-listing) and corporate governance mechanisms on narrative risk disclosure.
Practical implications - The study's findings have practical implications. It informs investors about the
characteristics of UK companies that disclose risk information in their interim reports. For example, the findings
show that narrative risk disclosures are affected by firm size and industry type rather than firms' risk levels (e.g.
financing risk measured by the gearing ratio or liquidity risk measured by lower liquidity ratios). Practical
implications for managers from these findings are that, in order to keep investors satisfied, companies with high
levels of financing and liquidity risks should look at investors' demands for risk disclosure. This will help
investors when making their investment decisions. Originality/value - The determinants of narrative risk
disclosure in interim reports have not been explored so clearly in prior research and, therefore, this paper is the
first of its kind to examine this research issue for a sample of UK companies.

Subject: Studies; Disclosure; Interim reports; Financial reporting; Regression analysis; Annual reports;
Reporting requirements; Management decisions; Institutional investments; International finance; Variables;
Risk;

Location: United Kingdom--UK

Classification: 9130: Experimental/theoretical; 9175: Western Europe; 3300: Risk management

Publication title: The Journal of Risk Finance

Volume: 13

Issue: 2

Pages: 133-147

Publication year: 2012

Publication date: 2012

Year: 2012

Publisher: Emerald Group Publishing, Limited

Place of publication: London

Country of publication: United Kingdom

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Publication subject: Business And Economics--Banking And Finance

ISSN: 15265943

Source type: Scholarly Journals

Language of publication: English

Document type: Feature

DOI: http://dx.doi.org/10.1108/15265941211203189

ProQuest document ID: 923392458

Document URL: http://search.proquest.com/docview/923392458?accountid=87693

Copyright: Copyright Emerald Group Publishing Limited 2012

Last updated: 2012-03-28

Database: ProQuest Central

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