Voluntary Risk Disclosure and Investors Behaviour in the Nigerian Capital Market
Abstract
This study examined the relationship between voluntary risk disclosure and behaviour of investors in the Nigerian capital market. The main objective of the study was to examine the extent to which investors in the capital market react to disclosure of information on risk in the annual reports. The study used ex-post facto research design. The population of the study was the 196 firms listed on the floor of the stock exchange. The sample size of 60 was drawn through convenience and stratified sampling techniques. The control variables of the study was the investor’s behaviour which was proxied by market capitalization. The independent variable was the risk disclosure in the annual report. Content analysis was used to select the attributes of risk disclosure in the financial statements of the companies based on the disclosure index developed by the researcher for the period 2015 to 2019. The data were analysed using descriptive statistics and simple regression model. The results of the analysis show that the disclosure of information on risk significantly affect the behaviour of investors in the Nigerian capital market. The study concluded that behaviour of investors in the capital market is positively affected by voluntary disclosure of information on risk in annual report of companies. The study recommended, amongst others, that the regulators should as much as possible persuade the preparers of financial statements to include more information of risk in their annual reports
Authors
- Sunday A. Okpo
Department of Accounting,
Akwa Ibom State University, Obio Akpa Campus.
saokpo@gmail.com (08037864947) - S. A. S. Aruwa
Department of Accounting,
Nasarawa State University, Keffi.
sasaruwa@gmail.com (08034511107)