The Quality of Mandatory Non-Financial (Risk) Disclosures: The Moderating Role of Audit Firm and Partner Characteristics

Saverio Bozzolan and Antti Miihkinen
Additional contact information
Saverio Bozzolan: Department of Business and Management, LUISS Guido Carli University, Viale Romania, 32, I-00198 Rome, Italy

The International Journal of Accounting (TIJA), 2021, vol. 56, issue 02, 1-55

Abstract: Risk disclosures are among the most important types of non-financial information valued by the investors. Risk disclosures are mostly narrative and proprietary in nature; consequently, their accuracy and assurance are highly important to prevent disclosures from becoming boilerplate and losing their relevance. By exploiting the unique features of a setting where risk disclosure is mandatory and under a positive assurance requirement, we investigate whether the quality of audited risk disclosures is associated with the type of audit firm (Big-4 versus non-Big-4), the characteristics of the audit firm, and the attributes of the audit partner. Our results show an association between risk disclosure quality and auditors, but not in the expected ways. After the enforcement of a regulation requiring a detailed description of risks in the Operating and Financial Review (OFR) and a positive assurance of external audit over these disclosures, we do not document any significant Big-4 effect. The quality of risk disclosures is associated with the attributes of the audit partner, namely, familiarity with different client risk disclosures, industry expertise, and gender, independently of an affiliation with a Big-4 audit firm. Along these lines, we extend recent evidence on the audit partner effects in the assurance of non-financial narrative information.

Keywords: Non-financial information; risk disclosure; positive assurance; audit partner characteristics (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1094406021500086
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:tijaxx:v:56:y:2021:i:02:n:s1094406021500086

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1094406021500086

Access Statistics for this article

The International Journal of Accounting (TIJA) is currently edited by A. Rashad Abdel-khalik

More articles in The International Journal of Accounting (TIJA) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().