Is it that Companies Voluntary Disclosure of Risk Information with Higher Risk?

• In Event: Teaching, Learning, and Curriculum 5

Abstract

This paper uses the listed companies of main board in Shenzhen Stock Exchange of China to explore the relationship between the probability of risk information disclosure and company’s risk. The results of Logit regression model indicates that the probability of risk information disclosure is negatively related to company’s operating risk and auditing risk. In particular, companies with higher growth rate of prime operating revenue, poorer operation capability and the ST companies are less likely to disclose risk information voluntarily, and companies that have disclosed auditing reports on internal control are more likely to disclose risk information. Meanwhile, the empirical evidence indicates that the probability of risk information disclosure is positively related to company’s financial risk. In conclusion, probability of voluntary disclosure of risk information is negatively related to company’s risk.

Author

• Baochun Guo, Jinan University