Abstract
The study of risk disclosure is a crucial area that has been receiving much attention, furthermore there were always many debates on whether the benefits gained from this type of disclosures are exceeding the associated costs. The main aim of this research is to examine the effect of some factors that are regarded as mandatory and voluntary determinants on the level of risk disclosure, additionally the research examine the Impact of risk disclosure on the cost of equity capital.
The research strategy is based on using content analysis to measure the level of risk disclosure (quantity/quality) in the annual financial reports, non-financial reports, company's website and/or information available with the Egyptian Stock Exchange website. The Research population is represented by listed joint stock companies in the Egyptian Stock Exchange and that are included in EGX100 index. The research sample is selected from firms distributed over a number of different economic and industrial sectors. The study covers the financial years 2016, 2017 and 2018, to measure the level of risk disclosure during this period. The cost of equity capital is measured using the Capital Asset Pricing Model (CAPM).
Based on the results of the data analyzing, the empirical study has reached a number of findings. First presence of a statistically significant relationship between the firm’s characteristics and the level of risk disclosure. Second, there is a statistically relationship between complying with corporate governance mechanisms and the level of risk disclosure. Third, the presence of a statistically significant relationship between ownership structure and the level of risk disclosure. Fourth, the study findings proved the presence of a statistically significant relationship between the disclosure of compliance with IFRS and the level of risk disclosure. Finally, the study found a negative association between the level of firms’ risk disclosure and the cost of their equity capital.
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