Corporate governance and risk disclosure: evidence from Saudi Arabia

Awad Ibrahim, Murya Habbash, Khaled Hussainey

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    Purpose: This study investigates the potential influence of corporate governance, ownership structure and corporate characteristics on risk disclosure level, in a developing country, Saudi Arabia, in which there is a lack of research in this area.

    Methodology: This study examines 408 annual reports of Saudi non-financial-listed firms during 2012-2015. We apply content and multiple regression analyses and use the number of the risk-related sentences as a proxy for risk disclosure level.

    Findings: The results indicate that the mean risk disclosure is 13 sentences with a minimum value of zero and a maximum value of 36 sentences. The results also show that CEO-Chairperson separation, audit committee effectiveness, state ownership, firm complexity, size and profitability positively affect risk disclosure. However, we find no significant correlations for board independence, institutional ownership, auditor type, leverage, and firm age.

    Originality/value: This study is important because it fills gaps in the disclosure literature, especially in developing and Arab countries, and responds to calls in previous studies, such as Dobler et al. (2011), Ntim et al. (2013), and Moumen et al. (2015), that recommend investigating the corporate governance determinants of risk disclosure in these contexts. The results are of interest to accounting setters and governance regulators. The study also provides an evaluation of the Saudi governance code formally applied in 2007.
    Original languageEnglish
    Pages (from-to)89-111
    JournalInternational Journal of Accounting, Auditing and Performance Evaluation
    Issue number1
    Early online date19 Nov 2018
    Publication statusPublished - Jan 2019


    • risk disclosure
    • corporate governance
    • ownership structure
    • content analysis
    • Saudi Arabia


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