De Luca Francesco, Phan Ho-Tan-Phat / Financial Reporting / 2-2019
Risk-related information is prevalently used in the decision-making process by various enterprises. Therefore, this study investigates how companies conduct their risk-disclosure practice after the new Italian Legislative Decree No. 254 of December 30, 2016. In particular, we draw attention to three aspects: (1) the interaction relationship among risk or risk management (RRM), industry, type of risk, and level of specific disclosure; (2) the variation of specific level of disclosing risk-related information across the industries and types of risk; and (3) the different behavior between risk and risk-management disclosure in the aftermath of the regulation’s issuance. The study is based on a sample of large undertakings and groups that are subject to the Legislative Decree. Two phases of content analysis were executed to analyze the risk and risk-management disclosure. The research questions were investigated with the row effects log-linear model. Our result shows that there are interaction relationships among RRM, type of risk, industry, and level of specific disclosure. Companies provide risk-related information at different levels of specificity depending on whether the information is risk description or risk management, the firms are operating in manufacturing or non-manufacturing and the type of risk that the firms disclosed in the reports.