Factors influencing voluntary corporate risk disclosure practices by Indonesian companies

Abstract

This study examines the influences of corporate governance and firm characteristics on risk disclosure of Indonesian public listed companies. To address this study’s research questions and hypotheses, a total of 118 annual reports were analysed using the content analysis method. The Linsley and Shrives (2006) checklist items were adopted and extended to measure the extent of risk disclosure. The results show that the mean of risk disclosure index is 32%. Statistical analysis shows that the size of the audit committee, the firm size, and financial performance are all positively related to the extent of risk disclosure. The implication of this finding suggests that corporate governance practices still do not sufficiently encourage firms to disclose greater risk disclosure This study provides insights into the current status of risk disclosure and the role of audit committees in enhancing risk disclosure practices in an emerging country.