Corporate risk disclosure: A systematic literature review and future research agenda

Figures & data

Figure 1. Analysis by year of publication.

Table 1. Analysis by journal of publication

Journals	No. of articles
Managerial Auditing Journal	8
Journal of Applied Accounting Research	6
International Review of Financial Analysis	5
The International Journal of Accounting	4
International Journal of Disclosure and Governance	2
British Accounting Review	2
International Journal of Finance and Economics	2
International Journal of Accounting, Auditing and Performance Evaluation	2
International Journal of Accounting & Information Management	2
World Review of Entrepreneurship Management and Sustainable Development	1
Journal of Banking Regulation	1
Journal of Banking & Finance	1
Advances in Accounting	1
Spanish Accounting Review	1
Review of Accounting Studies	1
Public Money and Management	1
International Financial Management and Accounting	1
European Business Review	1
Accounting Forum	1
Global Finance Journal	1
Journal of Accounting in Emerging Economies	1
EuroMed Journal of Business.	1
Pacific-Basin Finance Journal	1
Research in International Business and Finance	1
International Journal of Law and Management	1
Quarterly Review of Economics and Finance	1
Gender in Management: An International Journal	1
International Journal of Productivity and Performance Management	1
Journal of Financial Reporting and Accounting	1
Meditari Accountancy Research	1
Management Research Review	1
Journal of Business Research	1
Corporate Governance: The International Journal of Business in Society	1
Review of Social Economy	1
Pacific-Basin Finance Journal	1
Total	59

Table 2. Analysis by journal database

Database	Scope	Date of search	Time horizon	No. of articles
Elsevier	Title/Abstract/Keywords	31 December 2021	2004–2021	20
Emerald	Title/Abstract/Keywords	31 December 2021	2004–2021	26
Springer	Title/Abstract/Keywords	31 December 2021	2004–2021	4
Inderscience	Title/Abstract/Keywords	31 December 2021	2004–2021	3
Taylor & Francis	Title/Abstract/Keywords	31 December 2021	2004–2021	3
Wiley Online	Title/Abstract/Keywords	31 December 2021	2004–2021	3
Total				59

Table 3. Analysis by country

Continent	Country	Type of study	No. of papers
Europe	United Kingdom	within country	9
Asia	India	within country	6
Europe	Finland	within country	4
South America	United States	within country	3
Europe	Spain	within country	3
Europe	Portugal	within country	3
Asia	MENA	cross-counties	3
Asia	GCC	cross-counties	3
Asia	Japan	within country	3
Europe	Italy	within country	2
Europe	Portugal	within country	2
Australia	Australia	within country	2
Asia and Africa	Islamic countries	cross-counties	2
Asia	Jordan	within country	2
Africa	Egypt	within country	2
Africa	South Africa	within country	2
Africa	Tunisia	within country	2
Europe and North America	Germany and Canada	cross-counties	1
Asia	United Arab Emirates	within country	1
Asia	China	within country	1
Asia	Saudi Arabia	within country	1
Asia	Bangladesh	within country	1
Africa	South Africa and Nigeria	cross-counties	1
Total			59

Note: Islamic countries: Bahrain, Indonesia, Jordan, Kuwait, Malaysia, Pakistan, Qatar, Saudi Arabia, Tunisia, Egypt, Turkey and United Arab Emirates. Gulf Cooperation Council (GCC): Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and United Arab Emirates. Middle East and North Africa (MENA): Bahrain, Egypt, Jordan, Iraq, Kuwait, Lebanon, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Syria, Tunisia and United Arab Emirates.

Table 4. Analysis by citation

Author		Journal	Citations
Linsley and Shrives (2006)		The British Accounting Review	921
Beretta and Bozzolan (2004)		The International Journal of Accounting	865
Pérignon and Smith (2010)		Journal of Banking & Finance	421
Ntim et al. (2013)		International Review of Financial Analysis	317
Hassan (2009)		Managerial Auditing Journal	269
Oliveira et al. (2011)		Managerial Auditing Journal	263
Abraham and Shrives (2014)		The British Accounting Review	251
Miihkinen (2012)		The International Journal of Accounting	242
Hope et al. (2016)		Review of Accounting Studies	225
Barakat and Hussainey (2013)		International Review of Financial Analysis	222
Mokhtar and Mellett (2013)		Managerial Auditing Journal	174
Rajab and Handley-Schachler (2009)		World Review of Entrepreneurship Management and Sustainable Development	158
Miihkinen (2013)		Advances in Accounting	144
Allini et al. (2016)		Public Money and Management	139
Total			4611

Figure 2. Analysis by disclosure method.

Figure 3. Analysis by disclosure techniques.

Table 5. Summary of studies with at least 100 citations on Quality of CRD (2004–2021)

Author	Country (Period)	Theory	Sample	Measurement of Quality of CRD	Meaning source	Finding
Beretta and Bozzolan (2004)	Italy, 2001	None	85 non-financial firms	CRD measured using risk categories (company strategy, company characteristics and external environment) and semantic properties (economic sign, type of measure and outlook orientation). Method: quantitative (manual content analysis).	(FASB, 2001; ICAEW, 2002; Bell et al., 1997)	The study found that quality of CRD is low (43.3%). In addition, industry and firm size varies across the quality dimensions.
Linsley and Shrives (2006)	UK, 2001	Attribution theory	79 FTSE non- financial firms	CRD measured using risk categories (financial risk, operational risk, empowerment risk, information processing and technology risk, integrity and strategic risks) and semantic properties (nature of disclosure, time horizon and type of news). Method: quantitative (manual content analysis).	(ICAEW, 1997; Milne & Hackston, 1996)	CRD is incomplete and incoherent. Furthermore, CRD is related with firm size and environmental risk, while leverage and asset cover are not related with CRD.
Rajab and Handley-Schachler (2009)	UK, 1998–2004	Agency theory, political cost theory and signaling theory	52-non-financial firms listed	CRD measured using risk categories (operational risks, environmental risk and strategic risk) and semantic properties (nature of evidence, type of news and news time-frame). Method: quantitative (manual content analysis).	(Linsley & Shrives, 2006)	The study found an increasing trend of CRD from 50.23% (1998) to 93.5% (2004). Also, CRD is related with dual listing and involvement in heavy industries, while firm size and leverage are not related with CRD.
Hassan (2009)	UAE, 2005	Institutional theory and signaling theory	49 financial and non-financial firms listed in Dubai financial market	CRD measured as quantitative and qualitative risk information. Method: quantitative (manual content analysis).	(Beretta & Bozzolan, 2004; Linsley & Shrives, 2006)	The study found that quality of CRD is low. Additionally, industry leverage influences risk disclosure while firm size does not.
Pérignon and Smith (2010)	USA, 1996–2005	None	10 largest international banks	CRD measured using value at risk characteristics, summary of value at risk summary, intertemporal comparison, daily value at risk figures, trading revenues and back testing. Method: quantitative (manual content analysis).	(BCBS, 1996)	The study found that quality of value at risk disclosure remained low while the level improved.
Oliveira et al. (2011)	Portugal, 2005	Agency theory, legitimacy theory and resources-based perspective.	42 non-financial firms listed in Euronext Lisbon market	CRD categorised as financial risk and non-financial and included semantic properties (economic sign, type of measure, outlook and type of disclosure). Method: quantitative (manual content analysis).	(Abraham & Cox, 2007)	The study found that risk disclosures are vague, past and qualitative. Also, risk disclosures are not affected by guidelines. Likewise, firm size and leverage influence quality of risk disclosure.
Miihkinen (2012)	Finland, 2005–2006	None	99 non-financial firms listed in the OMX Helsinki	CRD measured using risk categories (strategic risks, operational risks, financial risks, damage risks and risk management) and quality indicators (quantity, coverage, depth and outlook profile. Method: quantitative (manual content analysis).	(Linsley & Shrives, 2006)	The study found that quality of CRD increased after the introduction of the Finnish standard. Moreover, CRD is associated with firm size, profitability level and listing status.
Miihkinen (2013)	Finland, 2005–2009	Efficient market theory	Non-financial firms listed in Helsinki	CRD measured using risk categories (strategic risks, operational risks, financial risks, damage risks and risk management) and quality indicators (quantity and coverage). Method: quantitative (manual content analysis).	(Linsley & Shrives, 2006)	CRD quality has a negative impact on information asymmetry. CRD is useful if it is provided by small companies
Barakat and Hussainey (2013)	Europe, 2008–2010	Agency theory, management entrenchment theory, legitimacy theory, resource dependence theory and stakeholder theory	85 banks from 20 EU members	CRD measured using operational risk disclosure with 14 risk categories. Method: quantitative (manual content analysis).	(BCBS, 2006)	Banks provide moderate risk disclosures. Furthermore, outside board directors, lower executive ownership, concentrated outside non-governmental ownership and active audit committee are associated with quality risk disclosure.
Ntim et al. (2013)	South Africa, 2002–2011	Agency, legitimacy, institutional, resource-dependence and stakeholder theories	50 non-financial firms listed in the Johannesburg Stock Exchange	CRD measured using risk categories (financial risks, operational risks and strategic risks) or 50 CRD items and quality indicators (nature of information and type of information, outlook). Method: quantitative (manual content analysis).	(Linsley & Shrives, 2006; King Committee, 2002)	CRD is largely non-financial, historical, qualitative and good news. Likewise, CRD is positively associated with board diversity, board size and independent non-executive directors, while block ownership and institutional are negatively related. In addition, dual board leadership structure is not related with CRD.
Mokhtar and Mellett (2013)	Egypt, 2007	Proprietary cost, agency theory, stakeholder theory, political cost, signaling theory and legitimacy theory	105 non-financial companies listed Egyptian Exchange	CRD measured using risk categories (financial risks, operational risks, empowerment risks, information processing and technology risks, integrity risks and strategic risks) and quality indicators (nature of information, type of information and outlook). Method: quantitative (manual content analysis).	(Linsley & Shrives, 2006)	The study found that quality of CRD is low (21.57%). Moreover, competition, role duality, ownership concentration, board size and auditor size influence CRD.
Abraham and Shrives (2014)	UK, 2002–2007	Proprietary and Institutional theory	Food producers and processing sector, four companies	CRD categorised as general, company-specific and analysed for meaning. Method: quantitative (manual content analysis).	(Abraham & Cox, 2007)	Risk disclosures are routine and general.
Hope et al. (2016)	USA, 2006–2011	Proprietary costs theory	A sample of 14,865 observations in 10-Ks	Developed measure of the degree of specificity in firms’ risk-factor disclosures (Item 1A in the 10-K report) using computing algorithm. Method: quantitative (automated content analysis).	(Kravet & Muslu, 2013)	The market reaction to the 10-K filing is positively and significantly associated with specificity.
Allini et al. (2016)	Italy, 2008–2011	Agency theory and signaling theory	Sample of 17 SOEs	Adopted Linsley and Shrives (2006) definition of risk, and computer-based content analysis to generate the risk disclosure score. Method: quantitative (automated content analysis).	(Kravet & Muslu, 2013)	The study found that quality of CRD is low (12.06). Additionally, gender, age of board members and directors having accounting/finance/business qualification negatively influence CRD, while company size and internet visibility positively influence CRD.

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