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UAE corporations-specific characteristics and level of risk disclosure


  • Mostafa Kamal Hassan


Purpose - The purpose of this paper is to explore the relationship between the UAE corporations-specific characteristics, mainly – size, level of risk, industry type and reserves – and level of corporate risk disclosure (CRD). Design/methodology/approach - Since the UAE is an emerging capital market, the paper relies on the positive accounting and the institutional theories to generate testable hypotheses and explain the empirical findings. The paper draws results depending on a sample of 41 corporations. A risk disclosure index – based on accounting standards, prior literature, and the UAE regulatory framework – has been crafted and calculated for each corporation in the sample. The relationship between the level of CRD and corporations' characteristics is examined using multiple regression analysis. Findings - The results show that corporate size is not significantly associated with the level of CRD. However, the corporate level of risk and corporate industry type are significant in explaining the variation of CRD. Finally, in contrast with reserves-CRD hypothesized relationship, corporate reserve is insignificant and negatively associated with level of CRD. Research limitations/implications - The risk disclosure index items reflect their existence in annual reports rather than their level of importance. Practical implications - The empirical findings suggest that corporate reserve, as an explanatory variable, needs further investigation as explained in the paper. Originality/value - The crafting process of the CRD index depends on the UAE regulatory framework. The paper seems to add to the extremely limited literature relating to CRD in Arab countries in general and the UAE in particular.

Suggested Citation

  • Mostafa Kamal Hassan, 2009. "UAE corporations-specific characteristics and level of risk disclosure," Managerial Auditing Journal, Emerald Group Publishing, vol. 24(7), pages 668-687, July.
  • Handle: RePEc:eme:majpps:v:24:y:2009:i:7:p:668-687

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    References listed on IDEAS

    1. Dulacha G. Barako & Phil Hancock & H. Y. Izan, 2006. "Factors Influencing Voluntary Corporate Disclosure by Kenyan Companies," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(2), pages 107-125, March.
    2. Lopes, Patricia Teixeira & Rodrigues, Lucia Lima, 2007. "Accounting for financial instruments: An analysis of the determinants of disclosure in the Portuguese stock exchange," The International Journal of Accounting, Elsevier, vol. 42(1), pages 25-56.
    3. Philip M. Linsley & Michael J. Lawrence, 2007. "Risk reporting by the largest UK companies: readability and lack of obfuscation," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 20(4), pages 620-627, July.
    4. Chamisa, Edward E., 2000. "The Relevance and Observance of the IASC Standards in Developing Countries and the Particular Case of Zimbabwe," The International Journal of Accounting, Elsevier, vol. 35(2), pages 267-286, July.
    5. repec:bla:joares:v:31:y:1993:i:2:p:246-271 is not listed on IDEAS
    6. Bushman, Robert M. & Smith, Abbie J., 2001. "Financial accounting information and corporate governance," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 237-333, December.
    7. Aljifri, Khaled & Khasharmeh, Hussein, 2006. "An investigation into the suitability of the international accounting standards to the United Arab Emirates environment," International Business Review, Elsevier, vol. 15(5), pages 505-526, October.
    8. Skinner, Douglas J., 1993. "The investment opportunity set and accounting procedure choice : Preliminary evidence," Journal of Accounting and Economics, Elsevier, vol. 16(4), pages 407-445, October.
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    Cited by:

    1. KIM, Hyonok & YASUDA, Yukihiro, 2016. "Mandatory adoption of business risk disclosure: evidence from Japanese firms," Working Paper Series G-1-14, Center for Financial Research, Graduate School of Commerce and Management, Hitotsubashi University.
    2. repec:nax:conyad:v:63:y:2018:i:2:p:25-26 is not listed on IDEAS
    3. Jonas Oliveira & Lúcia Lima Rodrigues & Russell Craig, 2011. "Risk-related disclosures by non-finance companies: Portuguese practices and disclosure characteristics," Managerial Auditing Journal, Emerald Group Publishing, vol. 26(9), pages 817-839, October.
    4. repec:eee:advacc:v:29:y:2013:i:2:p:312-331 is not listed on IDEAS
    5. Farahnaz Orojali Zadeh & Siti Zaleha Abdul Rasid & Rohaida Basiruddin & Nor Aiza Mohammmed Zamil & Amin Vakilbashi, 2016. "Risk Disclosure Practices among Malaysian Listed Firms," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1092-1096.
    6. repec:eee:riibaf:v:45:y:2018:i:c:p:413-426 is not listed on IDEAS
    7. repec:ora:journl:v:1:y:2017:i:1:p:235-246 is not listed on IDEAS
    8. Abdallah, Abed Al-Nasser & Hassan, Mostafa Kamal & McClelland, Patrick L., 2015. "Islamic financial institutions, corporate governance, and corporate risk disclosure in Gulf Cooperation Council countries," Journal of Multinational Financial Management, Elsevier, vol. 31(C), pages 63-82.


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