IDEAS home Printed from https://ideas.repec.org/a/ibf/acttax/v8y2016i1p1-25.html
   My bibliography  Save this article

Value Relevance Of Voluntary Risk Disclosure Levels: Evidence From Saudi Banks

Author

Listed:
  • Abdullah Al-Maghzom
  • Khaled Hussainey
  • Doaa Aly

Abstract

This study seeks to examine whether the levels of voluntary risk disclosure in Saudi listed banks are valuerelevant or not. The sample of this investigation consists of all banks listed on the Saudi Stock Market Exchange (Tadawul). All data was collected from the annual reports of the sample banks from 2009 to 2013 using manual content analysis. Other variables were collected using DataStream and Bloomberg. Ordinary least squares regressions analysis was used. The findings of the multivariate analysis demonstrated that there is no association between the levels of voluntary risk disclosure and firm value as measured by the market to book value at the end of the year (MTBV). But, the results generate from the accounting based measure (ROA) show that there is a positively significant association between the levels of voluntary risk disclosure and firm value. This study contributes to the literature on general accounting disclosure and in particular advances and contributes to the literature on risk disclosure in developing economies. It also contributes to the understanding of the role of accounting information in relation to the market valuation of a firm. The empirical findings of this study have several implications for banks’ investors, regulatory bodies and any other interested group as they report the importance of corporate risk disclosure and its economic consequences. This can be used to increase the value relevance in the banking sector. This study also informs regulators about the current level of risk disclosure in all Saudi listed banks.To the best of the researcher’s knowledge, no prior research has been conducted on the relationship between firm value and levels of risk disclosure in general nor especially in emerging markets, such as Saudi Arabia, the focus of this study

Suggested Citation

  • Abdullah Al-Maghzom & Khaled Hussainey & Doaa Aly, 2016. "Value Relevance Of Voluntary Risk Disclosure Levels: Evidence From Saudi Banks," Accounting & Taxation, The Institute for Business and Finance Research, vol. 8(1), pages 1-25.
  • Handle: RePEc:ibf:acttax:v:8:y:2016:i:1:p:1-25
    as

    Download full text from publisher

    File URL: http://www.theibfr2.com/RePEc/ibf/acttax/at-v8n1-2016/AT-V8N1-2016-1.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Issal Haj-Salem & Salma Damak Ayadi & Khaled Hussainey, 2020. "The joint effect of corporate risk disclosure and corporate governance on firm value," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(2), pages 123-140, September.

    More about this item

    Keywords

    Banks; Saudi Arabia; Risk Disclosure; Economic Consequences; Firm Value;

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibf:acttax:v:8:y:2016:i:1:p:1-25. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mercedes Jalbert). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.