What drives mandatory and voluntary risk reporting variations across Germany, UK and US?

Tamer Elshandidy, Ian Fraser, Khaled Hussainey

Research output: Contribution to journalArticle (Academic Journal)peer-review

48 Citations (Scopus)

Abstract

This paper utilises computerised textual analysis to explore the extent to which both firm and country characteristics influence mandatory and voluntary risk reporting (MRR and VRR) variations both within and between non-financial firms across Germany, the UK and the US, over the period from 2005 to 2010. We find significant variations in MRR and VRR between firms across the three countries. Further, we find, on average, that German firms tend to disclose significantly higher (lower) levels of risk information mandatorily than UK (US) firms. German firms, on average, tend to reveal considerably higher (lower) levels of VRR than US (UK) firms. Our results document that MRR and VRR variations are significantly influenced by systematic risk, the legal system and cultural values. We also find that country and firm characteristics have higher explanatory power over the observed variations in MRR than over those in VRR.
Original languageEnglish
Pages (from-to)376–394
JournalBritish Accounting Review
Volume47
Issue number4
DOIs
Publication statusPublished - 2015

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