DEVELOPMENT OF THE MODIFIED CORPORATE RISK DISCLOSURE INDEX FOR BUSINESS SUSTAINABILITY
DOI:
https://doi.org/10.24191/VoA.v21i1.11779Keywords:
corporate risk, disclosure, oversight, monitoring, sustainabilityAbstract
The paper aims to outline the development of the Modified Corporate Risk Disclosure index. Its primary objective is to assist organizations in the case of oversight and monitoring of strategies to achieve long-term business sustainability. The Modified Corporate Risk Disclosure Index, comprising 134 items, is designed to serve as a detailed and comprehensive checklist for evaluating the level of corporate risk disclosure in corporations' annual reports. It is anticipated that the Modified Corporate Risk Disclosure Index will elevate companies’ level of corporate risk disclosure by highlighting the advantages of having such an index. The benefit of creating this index is to establish a comprehensive framework that ensures long-term sustainability of the business and emphasizes transparent communication of potential risks to facilitate oversight and evaluation of the company's strategy.
References
Abraham, S., & Cox, P. (2007). Analysing the relationship between risk disclosure and corporate governance: Evidence from the UK. Corporate Governance: An International Review, 15(3), 423-434.
Abraham, S., & Cox, P. (2012). The role of corporate governance in mitigating the effects of risk disclosure on firm performance. Journal of Risk and Financial Management, 5(4), 123-146.
Abdullah, M., Abdul Shukor,Z., Mohamed, Z., M. & Ahmad, A.)2015). Risk management disclosure A study on the effect of voluntary risk management disclosure toward firm value. Journal of Applied Accounting Research, 16(3), 400-432.
ACCA. (n.d.). Corporate governance and risk management. Association of Chartered Certified Accountants. https://www.accaglobal.com
Ahmad, D. H. A., Joseph, C., & Said, R. (2022). Developing the modified accountability disclosure index for local governments. International Journal of Public Sector Performance Management, 10(2-3), 302-322.
Alkurdi, A., Hussainey, K., Tahat, Y., & Aladwan, M. (2019). The impact of corporate governance on risk disclosure: Jordanian evidence. Academy of Accounting and Financial Studies Journal, 23(1), 1-16.
Allini, A., Mazzoni, M., & Manes-Rossi, F. (2016). The role of corporate governance in voluntary risk disclosure: Evidence from Italian listed companies. Journal of Risk and Financial Management, 9(1), 6.
Al-Shammari, B., & Al-Sultan, W. (2010). Corporate governance and voluntary disclosure in Kuwait. International Journal of Disclosure and Governance, 7, 262-280.
Amran, A., Bin, A. M. R., & Hassan, B. C. H. M. (2009). Risk reporting: An exploratory study on risk management disclosure in Malaysian annual reports. Managerial Auditing Journal, 24(1), 39-57.
Azuma-Kotei, Z. A., & Ibrahim, A. E. A. (2024, October 28). The concept of corporate risk: Perspectives of risk disclosure’s users and preparers. Accounting in Europe. https://doi.org/10.1080/17449480.2024.2419660
Beretta, S., & Bozzolan, S. (2004). A framework for the analysis of firm risk communication. The International Journal of Accounting, 39(3), 265-288.
Botosan, C. A. (1997). Disclosure level and the cost of equity capital. The Accounting Review, 72(3), 323-349.
Buckby, S., McMahon, S., & Wilton, M. (2015). The impact of risk disclosure on financial performance: Evidence from UK companies. Accounting and Business Research, 45(3), 330-351.
Cabedo, J. D., & Tirado, J. (2014). The relevance of risk disclosure and its relationship with corporate governance in Spain. Corporate Governance: An International Review, 22(1), 78-98.
Chau, G., & Gray, S. J. (2010). Family ownership, board committees, and firm performance: Evidence from Hong Kong. Corporate Governance: An International Review, 18(4), 342-362.
Claessens, S., Djankov, S., & Lang, L. H. P. (1999). The separation of ownership and control in East Asian corporations. Journal of Financial Economics, 58(1-2), 81-112.
Claessens, S., Djankov, S., & Lang, L. H. P. (2000). The separation of ownership and control in East Asian corporations. Journal of Financial Economics, 58(1-2), 81-112.
Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2017). Enterprise risk management—Integrating with strategy and performance. https://aaahq.org/portals/0/documents/coso/coso_erm_2017_main_v1_20230815.pdf
Deloitte. (2013). Governance in focus: Risk management – What boards need to know. Deloitte LLP.
Egyptian Accounting Standards. (2006). Egyptian accounting standards: Volume 1. Egyptian Society of Accountants and Auditors.
Elamer, A. A., Ntim, C. G., Abdou, H. A., Zalata, A. M., & Elmagrhi, M. (2019, April). The impact of multi-layer governance on bank risk disclosure in emerging markets: The case of Middle East and North Africa. Accounting Forum, 43(2), 246-281. Routledge.
Gibson, M. S. (2003). Is corporate governance effective in emerging markets? Journal of Financial Economics, 67(3), 459-488.
Gonenc, H., & Aybar, C. B. (2006). Financial crisis and firm performance: Empirical evidence from Turkey. Corporate Governance: An International Review, 14(4), 297-311.
Gupta, R., & Symss, J. (2023). Corporate risk disclosure and its impact on investor decision-making: Evidence from recent studies. International Journal of Accounting and Financial Reporting, 13(1), 115-138.
Hassan, M. K. (2009). UAE corporations‐specific characteristics and level of risk disclosure. Managerial Auditing Journal, 24(7), 668-687.
Hashim, F., & Koon, L. T. (2017). Corporate risk management disclosure and corporate sustainability: The role of diversification. Global Business and Management Research, 9(4s), 144–158.
Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(1-3), 405-440.
Institute of Chartered Accountants in England and Wales. (2011). Reporting business risks: Meeting expectations. Retrieved August 8, 2024, from https://www.icaew.com/-/media/corporate/files/technical/corporate-reporting/information-for-better-markets/ifbm-reports/rbr-final.ashx
International Accounting Standards Board. (2014). IFRS 9: Financial instruments. Retrieved August 8, 2024, from https://www.ifrs.org/
International Organization for Standardization [ISO]. (2018). ISO 31000:2018: Risk management — Guidelines (Standard No. ISO 31000). ISO. https://shahrdevelopment.ir/wp-content/uploads/2020/03/ISO-31000.pdf
James, B. J., Joseph, C., & Said, R. (2023). Development of the Modified Strategic Management Accounting Disclosure Index (MoSMADi) for companies’ decision-making, control and monitoring of business strategies in attaining business sustainability. Journal of Contemporary Issues in Business and Government, 29(1), 450-469.
Jones, M. J. (2006). Disclosure of accounting policies and the role of financial analysts: Evidence from the UK. European Accounting Review, 15(2), 203-225.
Joseph, C., Rahmat, M., Syed Yusuf, S. N., Janang, J. T., & Madi, N. (2023). The ethical value disclosure index from the lens of SDG 16 and institutional theory. International Journal of Ethics and Systems, 39(3), 612-628. https://doi.org/10.1108/IJOES-05-2021-0109
Khan, A. (1999). Corporate governance in emerging markets: Insights from Pakistan. International Journal of Accounting, 34(1), 21-43.
Khlifi, R., & Bouri, A. (2010). The determinants of voluntary risk disclosure: Evidence from the Tunisian context. International Journal of Accounting and Information Management, 18(3), 234-257.
Kiflee, A., K., Ri. & Ali Khan, M., N., A. (2021) The effect of performance and corporate governance to risk disclosure among listed companies in Malaysia. Asia-Pacific Management Accounting Journal, 16(1) 119-161.
King Committee on Corporate Governance. (2002). King II Report on Corporate Governance for South Africa 2002. Institute of Directors in Southern Africa.
Klapper, L. F., & Love, I. (2004). Corporate governance, investor protection, and performance in emerging markets. Journal of Corporate Finance, 10(5), 703-728.
Linsley, P. M., & Shrives, P. J. (2005). Examining risk reporting in UK public companies. The Journal of Risk Finance, 6(4), 292-305.
Linsley, P. M., & Shrives, P. J. (2006). Risk reporting: A study of risk disclosures in the annual reports of UK companies. The British Accounting Review, 38(4), 387-404.
Madrigal, M. H., Guzmán, B. A., & Guzmán, C. A. (2015). Determinants of corporate risk disclosure in large Spanish companies: a snapshot. Contaduría y administración, 60(4), 757-775.
Mohd Ali, M. & Taylor, D. (2014). Corporate risk disclosure in Malaysia: The influence of predispositions of chief executive officers and chairs of audit committee. Research Journal of Finance and Accounting, 5(2), 92-107.
Mbithi, E., Moloi, T., & Wangombe, D. (2022). Corporate risk disclosure: A systematic literature review and future research agenda. Cogent Business & Management, 9(1), 1-23. DOI: 10.1080/23311975.2022.2105569
Miihkinen, A. (2012). What drives quality of firm risk disclosure?: The impact of a national disclosure standard and reporting incentives under IFRS. The International Journal of Accounting, 47(4), 437-468.
Miihkinen, A. (2013). Risk disclosure and corporate governance: Evidence from Finnish firms. European Journal of Finance, 19(5), 431-453.
Mio, C., Canestraro, N., & Costantini, A. (2024, September 30). The state of the art on corporate risk disclosure: A systematic literature review (Venice School of Management - Department of Management Working Paper No. 7). SSRN. http://dx.doi.org/10.2139/ssrn.4971413
Mitton, T. (2002). A cross-firm analysis of the impact of corporate governance on firm value. Journal of Financial Economics, 68(2), 239-262.
Salem, I. H., Ayadi, S. D., & Hussainey, K. (2019). Corporate governance and risk disclosure quality: Tunisian evidence. Journal of Accounting in Emerging Economies, 9(4), 567-602.
Sawani, Y., Joseph, C., & Siow, H. L. (2023). Development of Sustainable Development Goals Disclosure Index for Higher Education Institutions. International Journal of Service Management and Sustainability, 8(2), 81-100.
Sila, V., Gonzalez, A., & Hagendorff, J. (2016). The effects of corporate governance on firm performance: Evidence from the U.K. European Financial Management, 22(2), 295-317.
Siregar, S. V., & Siagian, H. (2013). The effect of corporate governance and risk disclosure on firm performance: Evidence from Indonesia. Journal of Financial Reporting and Accounting, 11(2), 180-199.
Solomon, J., Solomon, A., & Norton, S. (2000). Corporate governance and risk disclosure: An empirical analysis of the UK. Corporate Governance: An International Review, 8(2), 82-97.
Uddin, S., & Choudhury, J. (2008). Rationality, traditionalism and the state of corporate governance mechanisms: Illustrations from a less‐developed country. Accounting, Auditing & Accountability Journal, 21(7), 1026-1051.
Wang, J., Wu, Z., Fang, X., & Xiu, H. (2024). Corporate risk disclosure in response to heightened entry threat: Evidence from a quasi-natural experiment in China. Global Finance Journal, 63, 1-18.
Zadeh, F. O., & Eskandari, A. (2012). Firm size as company's characteristic and level of risk disclosure: Review on theories and literatures. International Journal of Business and Social Science, 3(17).
Zyznarska-Dworczak, A., & Rudionienė, D. (2022). Corporate risk disclosure and its influence on financial performance: Evidence from Polish companies. Journal of Risk and Financial Management, 15(10), 453.
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
