INTERNAL CORPORATE GOVERNANCE MECHANISMS AND RISK DISCLOSURE: EVIDENCE FROM TUNISIA

Salem Boumediene, Fatma Ezzahra Abdallah, Salma Ben Moussa and Emna Boumediene

Accounting & Taxation, 2022, vol. 14, issue 1, 15-30

Abstract: Voluntary risk disclosure in the annual reports is increasingly becoming a more common corporate practice. This study aims to examine the impact of internal corporate governance mechanisms of Tunisian companies, on the quality and extent of risk disclosure. Using content analysis followed by a multivariate analysis of a sample of 170 company-year observations from 2011 to 2015, the results indicate that institutional, foreign, and government ownership negatively affect the extent of risk disclosure. However, ownership concentration has a positive effect on the extent of corporate risk disclosure. We also find that audit committee’s size has a positive effect on corporate risk disclosure. Finally, we show that board size has a positive effect on corporate risk disclosure, while the presence of woman within the board negatively affects the extent of corporate risk disclosure. Moreover, our analysis reveals that Tunisian companies tend to disclose mainly non-financial risk in their annual reports. Overall, the research provides a new channel through which internal corporate governance mechanisms impact financial reporting. This study contributes to and extends the literature on corporate risk by offering a new perspective on emerging countries’ disclosure of risk.

Keywords: Corporate Risk Disclosure; Ownership Structure; Board of Directors; Audit Committee (search for similar items in EconPapers)
JEL-codes: C23 G34 M42 (search for similar items in EconPapers)
Date: 2022
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