Keywords
financial reporting
financial information
JEL: G32, M41
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Abstract
Financial risk is an inherent aspect of the operations of publicly traded companies, affecting their operating, investing, and financing activities. Therefore, a detailed description of financial risk exposure and the policies and methods of risk management are crucial information that should be presented in the financial statements. A specific motivation for undertaking research on the financial risk disclosure was the outbreak of the COVID-19 pandemic, during which many companies experienced increased exposure to various types of financial risk. The aim of this article is to assess the extent of financial risk disclosure in the financial statements of companies listed on the Warsaw Stock Exchange (WSE) from 2018 to 2023, and to identify the factors that affect the level of detail in these disclosures. Based on the provisions of IFRS 7 and IFRS 9, a questionnaire was developed to examine the extent of financial risk disclosure. The study was conducted based on the financial statements of 30 companies listed on the WSE for the years 2018–2023. Using the Spearman correlation test, linear regression model estimations, and the Student’s t-test, the study found that company size, level of debt, and the audit firm examining the financial statements all influence the extent of financial risk disclosure. The results show that companies disclosed more information about financial risk after the economic and public health crisis caused by the COVID-19 pandemic than before its outbreak.
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