Risk Disclosure Noncompliance

Abstract

We examine companies’ risk disclosure compliance with IFRS risk disclosure rules for the first fiscal year following the year 2007. For a sample of 383 firms from 20 European countries we find that average risk disclosure compliance is 62 percent only. Countries’ enforcement strength is generally positively associated with risk disclosure compliance, and even more effective in the presence of outsiders’ monitoring. We highlight that cross-country differences in enforcement must be properly accounted for to ensure consistent risk disclosure compliance.

Keywords: risk disclosure, enforcement, noncompliance

JEL Classification: G18, G30, M41, M48