Author(s): Najeb Masoud
The primary purpose of this study is to investigate the issue of compliance with the risk disclosure requirements indicated in the IFRS 7 and ISA 39. The investigation is undertaken with non-financial firms in the UK, listed in the FTSE-350 index and covers a six-year period (2007-2014). A quantitative approach involving panel data regression analysis is adopted to determine the impact of firm variables on the extent of risk disclosure compliance in annual reports. A sample of 175 non-financial UK listed firms is used. The results of the study indicate that over the six-year period, the extent of risk disclosure compliance with IFRS 7 and IAS 39 is, on average, 42.93% which is considered very low. The regression results suggest that the variables of governance, leverage, and firm size are positively and significantly associated, while profitability is negatively and insignificantly associated with the extent of risk disclosure compliance under IFRS 7 and IAS 39. Several important empirical findings emerge, which provide much of insight regarding the relevance of these standards to countries outside the western context. Future researchers might concentrate more on other requirements, such as measurement and presentation, on including financial sectors, and on giving attention to the other scoring methods mentioned in the study.