Ex-post Information Value of Risk Disclosure

Kunio Ito, Tetsuyuki Kagaya and Hyonok Kim ()
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Kunio Ito: Hitotsubashi University
Tetsuyuki Kagaya: Hitotsubashi University
Hyonok Kim: Tokyo Keizai University

A chapter in International Perspectives on Accounting and Corporate Behavior, 2014, pp 189-222 from Springer

Abstract: Abstract The purpose of this paper is to examine the effects of information security initiatives on corporate value and demonstrate the significance of establishing information security governance. In order to achieve this goal, we conducted three analyses. First, we focus on companies that disclosed information security risks in the “Business Risk etc.” section in their financial statements and examine how differently stock markets evaluate such companies as compared to those which do not when an information security incident occurred. We find that stock price of companies that disclosed information security risks fall by a smaller margin than those which did not. Secondly, according to a questionnaire survey of corporate users who utilized IT-related equipment, we find that companies those who properly disclosed their information security initiatives enjoy higher evaluations than those which did not. Finally, we also find that information security initiatives have positive effects on user preference and satisfaction in business dealings. Based on the results, it is considered that it is economically beneficial for companies to carry out information security initiatives. The results of this paper also imply that business risk disclosure has not only ex-ante information value but also ex-post information value.

Keywords: Corporate brand value; Information security; Information security incidents; Risk disclosure (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advchp:978-4-431-54792-1_9

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DOI: 10.1007/978-4-431-54792-1_9

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