Risk Disclosure and Firm Characteristics: Indian Evidence

Risk disclosure has gained momentum in the contemporary years due to changing scenario around the world. It assists in fostering transparency and is valuable to suffice the informational needs of the various stakeholders. The prime objective of this study is to examine the relationship between firm specific characteristics and risk disclosure in the annual reports of the Indian listed companies on the National Stock Exchange in the year 2015. Statistical analysis is implemented using multiple linear regression. The study concludes that the firm size is significantly and positively related to risk disclosure whereas the level of risk and profitability fail to discern any impact on the divulgation of risk information in the annual reports narratives. Further, as the study pertains to the period prior to mandatory implementation of accounting standard on risk disclosure namely accounting for financial risk which shows a lot of variability in divulgation of risk information making it of little use for the investors for taking up an informed decision.