Risk disclosure behaviour: evidence from the UK extractive industry

Stuart McChlery, Khaled Hussainey

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)
86 Downloads (Pure)


This paper contributes to risk management research with reference to disclosure of risk specific information within the oil and gas industry. This paper provides empirical evidence regarding voluntary and mandatory disclosure behaviour from both a quantitative and qualitative perspective.

A longitudinal empirical study examines probabilistic reserve quantum reporting of UK companies, over a time-period spanning voluntary and mandatory disclosure. The researchers analyse disclosure behaviour under voluntary and mandatory time spans using a logistical regression approach to measure determinants of risk reporting. Form of regulation is considered as the fundamental driver for disclosure whilst controlling for other relevant variables. Implications for developing international regulation are presented with suggestions for further research.

Mandatory reporting is not seen as a significant influence to disclosure. Degree of risk, quality of audit firms, level of stock exchange and organisational visibility each impact on disclosure. The findings indicate that a mandatory disclosure approach is ineffective, partially explained by mimetic and normative forces and a balancing of agency-related costs and benefits. There is an inverse relationship between level of risk and risk reporting.

Research limitations/implications
Generalisation of the findings is limited due to the specific context of the extractive industry.

Practical implications
The paper seeks to inform the International Accounting Standards Board's (IASB) on-going consideration of risk reporting and also its extractive industries deliberations.

The paper provides original insight into the area of risk management with particular focus on risk specificity and quantitative metrics for risk profiling not previously tested. The paper introduces risk profiling as a variable in risk disclosure.
Original languageEnglish
Pages (from-to)484-506
Number of pages23
JournalJournal of Applied Accounting Research
Issue number3
Early online date21 Feb 2021
Publication statusPublished - 7 May 2021


  • Extractive industry
  • Mandatory disclosure
  • Risk specificty
  • Risk reporting
  • Voluntary disclosure

ASJC Scopus subject areas

  • Accounting


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