Risk Information Practices in Annual Reports: An Indo-German Collaborative Comparison
Journal Title: MUDRA: Journal of Finance and Accounting - Year 2018, Vol 5, Issue 1
Abstract
This paper looks at the information given on risks as disclosed in Indian and German annual reports. Such annual reports are a method for overcoming the information asymmetry between investors and managers by gaining information on the performance and the associated risks of listed companies. They can also be of valuable for analysts and managers as a reference for their own reporting and (financial) analysis. We therefore analysed the annual reports of the companies in the Indian SENSEX index and compared them with the companies included in the German DAX index keeping in mind the regulatory framework of their operations. This was done with the help of an evaluation scheme, acting as a guideline for the qualitative content analysis. With disclosure requirements oscillating between mandatory and voluntary, we found that while companies of both indices comply with the mandatory requirements, information on voluntary basis, especially on numerical concrete risk reporting, can be improved, more so in the Indian context. Also, some companies in both economies have shown the way in comprehensively categorizing risk related information which can be adopted, where possible, by other companies in their respective indices. Overall, we found that (1) companies issue only few information on concrete risks, (2) the difference in information quality between the two samples is statistically significant, and (3) size and leverage can explain part of the variance within the samples.
Authors and Affiliations
Thomas Berger, Pankaj Trivedi, Sunil Parmar
Keywords
Related Articles
- EP ID EP625211
- DOI 10.17492/mudra.v5i01.13032
- Views 203
- Downloads 0
Shareholders’ Value Creation and Market Price of Share: A Study in Indian Context
Shareholders’ value creation has become a matter of concern in the world of financial management in recent times. Shareholders’ value creation refers to the net value addition for the shareholders. In the present corpora...
Cryptocurrency: A Comparative Study of Top Five Digital Currencies in India
This paper aims to draw a comparison among the top 5 cryptocurrencies available in India based on the market capitalisation rate. It also aims to highlight the pros and cons of each category of cryptocurrencies and prefe...
A Case Study of Ageing People: Real Life Scenario and Future Challenges
With people having longer lives, the share of older people in the total population is expanding rapidly, leading many retirees to face a challengeable life. Support from government and family are being reduced for the ol...
Financial Risk Identification- A Taxonomy based Study
Risk taking is the foundation of business activity. Quantifying it in an accurate manner such that the magnitude, impact, and point in time effect is recognized financially is critical for efficiency in business. Both un...
Customer Relationship Management Practices and Customer Loyalty in Commercial Banks: An Empirical Study
Differentiating products through best practices, providing timely services to encourage word of mouth publicity, and increasing quality of services through best practices have become benchmarks in retail banking sector i...