Title: Risk reporting of Japanese companies and its association with corporate characteristics

Authors: Noriyuki Konishi, Md. Mohobbot Ali

Addresses: Okayama University, Japan. ' Department of Accounting & Information Systems, Faculty of Business Studies, University of Dhaka, Dhaka-1000, Bangladesh

Abstract: This study aims to examine the relationship between corporate characteristics and level of risk reporting and to reveal the impact of issuing regulatory guidelines on risk reporting in annual reports. One hundred non-financial companies were randomly selected from the first section of the Tokyo Stock Exchange. Firstly, we find that, consistent with prior research, the size of the company and the number of risk disclosures are positively correlated. On the other hand, no significant relationship exists between the number of risk disclosures and other corporate characteristics. Secondly, the findings show that most of the companies disclose descriptive risk information but are reluctant to quantify risk. It also shows that the level of risk reporting has increased, at least in quantity, in annual reports after the issuance of regulatory guidelines on risk reporting by the Financial Service Agency.

Keywords: Accounting Standards Board of Japan; annual reports; ASBJ; corporate characteristics; Financial Service Agency; FSA; risk reporting; Tokyo Stock Exchange; voluntary risk reporting.

DOI: 10.1504/IJAAPE.2007.016281

International Journal of Accounting, Auditing and Performance Evaluation, 2007 Vol.4 No.3, pp.263 - 285

Published online: 15 Dec 2007 *

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