Risk disclosure behaviour: evidence from the UK extractive industry
Research output: Contribution to journal › Article › peer-review
Standard Standard
In: Journal of Applied Accounting Research, Vol. 22, No. 3, 07.05.2021, p. 484-506.
Research output: Contribution to journal › Article › peer-review
HarvardHarvard
APA
CBE
MLA
VancouverVancouver
Author
RIS
TY - JOUR
T1 - Risk disclosure behaviour: evidence from the UK extractive industry
AU - Mcchlery, Stuart
AU - Hussainey, Khaled
PY - 2021/5/7
Y1 - 2021/5/7
N2 - PurposeThis paper contributes to risk management research with reference to disclosure of risk specific information within the oil and gas industry. This paper provides empirical evidence regarding voluntary and mandatory disclosure behaviour from both a quantitative and qualitative perspective.Design/methodology/approachA longitudinal empirical study examines probabilistic reserve quantum reporting of UK companies, over a time-period spanning voluntary and mandatory disclosure. The researchers analyse disclosure behaviour under voluntary and mandatory time spans using a logistical regression approach to measure determinants of risk reporting. Form of regulation is considered as the fundamental driver for disclosure whilst controlling for other relevant variables. Implications for developing international regulation are presented with suggestions for further research.FindingsMandatory reporting is not seen as a significant influence to disclosure. Degree of risk, quality of audit firms, level of stock exchange and organisational visibility each impact on disclosure. The findings indicate that a mandatory disclosure approach is ineffective, partially explained by mimetic and normative forces and a balancing of agency-related costs and benefits. There is an inverse relationship between level of risk and risk reporting.Research limitations/implicationsGeneralisation of the findings is limited due to the specific context of the extractive industry.Practical implicationsThe paper seeks to inform the International Accounting Standards Board's (IASB) on-going consideration of risk reporting and also its extractive industries deliberations.Originality/valueThe paper provides original insight into the area of risk management with particular focus on risk specificity and quantitative metrics for risk profiling not previously tested. The paper introduces risk profiling as a variable in risk disclosure.
AB - PurposeThis paper contributes to risk management research with reference to disclosure of risk specific information within the oil and gas industry. This paper provides empirical evidence regarding voluntary and mandatory disclosure behaviour from both a quantitative and qualitative perspective.Design/methodology/approachA longitudinal empirical study examines probabilistic reserve quantum reporting of UK companies, over a time-period spanning voluntary and mandatory disclosure. The researchers analyse disclosure behaviour under voluntary and mandatory time spans using a logistical regression approach to measure determinants of risk reporting. Form of regulation is considered as the fundamental driver for disclosure whilst controlling for other relevant variables. Implications for developing international regulation are presented with suggestions for further research.FindingsMandatory reporting is not seen as a significant influence to disclosure. Degree of risk, quality of audit firms, level of stock exchange and organisational visibility each impact on disclosure. The findings indicate that a mandatory disclosure approach is ineffective, partially explained by mimetic and normative forces and a balancing of agency-related costs and benefits. There is an inverse relationship between level of risk and risk reporting.Research limitations/implicationsGeneralisation of the findings is limited due to the specific context of the extractive industry.Practical implicationsThe paper seeks to inform the International Accounting Standards Board's (IASB) on-going consideration of risk reporting and also its extractive industries deliberations.Originality/valueThe paper provides original insight into the area of risk management with particular focus on risk specificity and quantitative metrics for risk profiling not previously tested. The paper introduces risk profiling as a variable in risk disclosure.
U2 - 10.1108/JAAR-09-2019-0134
DO - 10.1108/JAAR-09-2019-0134
M3 - Article
VL - 22
SP - 484
EP - 506
JO - Journal of Applied Accounting Research
JF - Journal of Applied Accounting Research
SN - 0967-5426
IS - 3
ER -