Linking Corporate Risk Disclosure Practices with Firm-Specific Characteristics in Saudi Arabia

• Main Authors: Norsiah Ahmad, Omer Saeed Habtoor, Nor Raihan Mohamad, Mohd Hassan Che Haat
• Format: Article
• Language: English
• Published: Universitas Gadjah Mada 2017-12-01
• Series: Gadjah Mada International Journal of Business
• Subjects: Corporate Risk Disclosure, Annual Reports, Firm-specific Characteristics, Saudi Arabia
• Online Access: https://jurnal.ugm.ac.id/gamaijb/article/view/26769

This study explores Corporate Risk Disclosure practices (CRD) in the annual reports of Saudi (non-financial) listed companies and investigates the relationship between the Saudi firm-specific characteristics and the level of such practices. Using content analysis of a sample of 307 company-year observations over the period of 2008-2011, the results indicate that Saudi Arabia provides a moderate level of CRD among the developed and developing countries. However, the content of this CRD is found to be of a low quality, by including non-financial, qualitative, neutral, or non-time-specific information. In addition, the unbalanced panel regression analysis shows a significant positive influence of firm size and audit firm size on the level of CRD. This indicates that Saudi companies which disclose higher risk-related information are those characterised by their larger size, and are audited by the Big 4 audit firms. This study contributes to the risk literature by providing an initial understanding of the CRD practices and their variations in light of the firm-specific characteristics in emerging markets in general and Arab countries in particular..