Understanding Fund Manager readership of annual report risk disclosure

Abraham, Santhosh; Slack, Richard

Abstract

An understanding of company risk for investment decisions is fundamental for capital market users such as fund managers. The annual report is an established source of risk reporting information. Whilst market-based studies highlight the economic value relevance of risk reporting, such disclosure at a firm level, has been widely criticised, failing to provide meaningful, decision-useful, information to users. Despite these criticisms, the small body of risk reporting literature that has directly engaged with capital market users provides evidence of their readership of such reporting but has not examined their reasoning behind this. Drawing on 24 interviews with fund managers, we examine the usefulness of risk reporting to them. The theoretical framing of comfort is employed to analyse themes emergent from the transcribed data. Applying senses of comfort helps to unpack the reasoning for their continued use of such reporting and to provide a counterpoint to the criticisms as to its lack of usefulness to such users. These findings, through direct engagement with a primary annual report user group, extend prior predominantly archival risk-based disclosure research and contribute to our understanding of user consumption of annual report information.

Citation

Abraham, S., & Slack, R. (2023). Understanding Fund Manager readership of annual report risk disclosure. Accounting Forum, https://doi.org/10.1080/01559982.2023.2267838

• Journal Article Type: Article
• Acceptance Date: Oct 4, 2023
• Online Publication Date: Nov 2, 2023
• Publication Date: Nov 2, 2023
• Deposit Date: Oct 4, 2023
• Publicly Available Date: Nov 7, 2023
• Journal: Accounting Forum
• Print ISSN: 0155-9982
• Electronic ISSN: 1467-6303
• Publisher: Taylor and Francis Group
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1080/01559982.2023.2267838
• Public URL: https://durham-repository.worktribe.com/output/1756590