Analysis of risk management disclosures by Australian publicly listed companies

Ma, Angela, Buckby, Sherrena, & Gallery, Gerry T. (2012) Analysis of risk management disclosures by Australian publicly listed companies. In Proceedings of the 2012 Accounting and Finance Association of Australia and New Zealand Conference, AFAANZ, Melbourne, VIC, pp. 1-30.

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Abstract

In the aftermath of the global financial crisis, effective risk management (RM) and its communication to stakeholders are now considered essential components in corporate governance. However, despite the importance of RM communication, it is still unclear how and to what extent disclosures in financial reports can achieve effective communication of RM activities. The situation is hampered by the paucity of international RM Research that captures institution differences in corporate governance standards. The Australian setting provides an ideal environment in which to examine RM communication because the Australian Securities Exchange (ASX) has since 2007 recommended RM disclosures under its principle-based governance rules. The recommendations are contained in Principle 7 of the Corporate Governance Principles and recommendations (ASX CGPR). Accordingly, to assess the effectiveness of the AXS's RM governance principle, this study examines the nature and extent of RM disclosures reported by major ASX-listed firms. Using a mixed method approach (thematic content analysis and a series of regression analysis) we find widespread divergence in disclosure practices and low conformance with the Principle 7 recommendations. Certain corporate governance mechanisms appear to influence some categories of RM dislcosure but equity risk has surprisingly little explanatory power. These results suggest that the RM disclosures practices observed in the Australian setting may not be meeting the objectives of regulators and the needs of stakeholders.

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ID Code: 78073
Item Type: Conference Paper
Refereed: Yes
Additional URLs:
Keywords: Risk management , Global Financial crisis, Australian Securities Exchange, Risk management disclosure
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2012 AFAANZ.
Deposited On: 28 Oct 2014 05:30
Last Modified: 30 Oct 2014 17:08

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