Output details

Improving the relevance of risk factor disclosure in corporate annual reports

Previous research indicates serious problems with risk reporting; it is neither useful nor meaningful to annual report users and is often decoupled from the real risks that corporates face. This article, prepared by two authors of earlier well cited and downloaded risk papers (both published in The British Accounting Review), uses theory to analyse the problems with risk reporting. Using examples from the food production and processing sector, a model is developed for assessing the quality of risk disclosures. Three questions are identified which need answering in annual report risk disclosures and a way forward for risk reporting is proposed.