Contingency perspective: company characteristics, risk management voluntary disclosure, and company performance
-
Published: September 1, 2023
-
Page: 1696-1704
Abstract
This study aims to examine the direct and indirect effect of firm characteristic on company performance through voluntary risk management disclosure based on contingency factors. This study uses secondary data with a content analysis approach to the acquisition of risk management disclosure data based on annual report from sample of companies listed on the Indonesia Stock Exchange in 2017-2019 after the IFRS convergence was implemented in Indonesia. Currently, the regulator only requires disclosures of financial risk management compared to non-financial risk disclosures. Therefore, this study is expected to provide empirical evidence regarding the importance of voluntary risk management disclosure on firm performance has contingent relationship with considering external factors, consists of (1) business uncertainty, and (2) dynamic environment. The implication of this research is expected to become a consideration for regulators and entities to disclose non-financial information in the company's annual report because it can affect company performance amidst the uncertain business environment in developing countries such as Indonesia
References
- Abdullah, M., Shukor, Z.A., Mohamed, Z.M. and Ahmad, A., 2015. Risk management disclosure: A study on the effect of voluntary risk management disclosure toward firm value. Journal of Applied Accounting Research.
- Addiyah, A. and Chariri, A., 2014. Pengaruh Good Corporate Governance Terhadap Kinerja Keuangan (Studi Kasus pada Perusahaan Perbankan yang Terdaftar di Bursa Efek Indonesia Tahun 2007-2009). Diponegoro Journal Of Accounting, 3(4), pp.146-153.
- Beretta, S. and Bozzolan, S., 2004. A framework for the analysis of firm risk communication. The International Journal of Accounting, 39(3), pp.265-288.
- Bushman, R., Chen, Q., Engel, E. and Smith, A., 2004. Financial accounting information, organizational complexity and corporate governance systems. Journal of Accounting and Economics, 37(2), pp.167-201.
- Danisman, G.O. and Demirel, P., 2019. Corporate risk management practices and firm value in an emerging market: A mixed methods approach. Risk Management, 21(1), pp.19-47.
- Dess, G.G. and Beard, D.W., 1984. Dimensions of organizational task environments. Administrative science quarterly, pp.52-73.
- Gerdin, J. and Greve, J., 2004. Forms of contingency fit in management accounting research—a critical review. Accounting, organizations and society, 29(3-4), pp.303-326.
- Gordon, L.A., Loeb, M.P. and Tseng, C.Y., 2009. Enterprise risk management and firm performance: A contingency perspective. Journal of accounting and public policy, 28(4), pp.301-327.
- Isbanah, Y., 2015. Pengaruh ESOP, leverage, and ukuran perusahaan terhadap kinerja keuangan perusahaan di bursa efek Indonesia. Jurnal Riset Ekonomi dan Manajemen, 15(1), pp.28-41.
- Kakanda, M.M. and Salim, B., 2017. Corporate governance, risk management disclosure, and firm performance: A theoretical and empirical review perspective. Asian Economic and Financial Review, 7(9), p.836.
- Kumalasari, M., Subowo, S. and Anisykurlillah, I., 2014. Faktor-Faktor yang Berpengaruh Terhadap Luas Pengungkapan Manajemen Risiko. Accounting Analysis Journal, 3(1).
- Linsley, P.M. and Shrives, P.J., 2006. Risk reporting: A study of risk disclosures in the annual reports of UK companies. The British Accounting Review, 38(4), pp.387-404.
- Mazaya, N. and Fuad, F., 2018. Business strategy, corporate governance, firm characteristics, and risk disclosure in the Indonesian Stock Exchange. Jurnal Keuangan dan Perbankan, 22(3), pp.381-394.
- Miihkinen, A., 2012. What drives quality of firm risk disclosure?: the impact of a national disclosure standard and reporting incentives under IFRS. The International Journal of Accounting, 47(4), pp.437-468.
- Miihkinen, A., 2013. The usefulness of firm risk disclosures under different firm riskiness, investor-interest, and market conditions: New evidence from Finland. Advances in Accounting, 29(2), pp.312-331.
- Moumen, N., Othman, H.B. and Hussainey, K., 2015. The value relevance of risk disclosure in annual reports: Evidence from MENA emerging markets. Research in International Business and Finance, 34, pp.177-204.
- Nurcahya, A.S., Wahyuni, E.D. and Setyawan, S., 2014. Pengaruh Good Corporate Governance, Ukuran Perusahaan dan Leverage terhadap kinerja Keuangan Perusahaan. Jurnal Reviu Akuntansi dan Keuangan, 4(1).
- Sari, E.F., 2018. Pengaruh Tata Kelola Perusahaan, Ukuran Perusahaan, Leverage, dan Pertumbuhan Penjualan Terhadap Kinerja Perusahaan Sektor Industri Barang Konsumsi yang Listing di Bursa Efek Indonesia Tahun 2016. Jurnal Ilmu Manajemen (JIM), 6(4).