Fruitless effort? The effects of risk management disclosure specificity on nonprofessional investors’ judgments
The widespread use of boilerplate disclosures in financial reporting has led regulators to express concerns about the decision-usefulness of annual reports. We conduct two experiments to determine the effects of risk management disclosure presence and specificity on nonprofessional investors’ judgme...
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| Format: | Article |
| Language: | English |
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Elsevier
2025-09-01
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| Series: | China Journal of Accounting Research |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S1755309125000280 |
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| author | Xinyan Miao Shaofei Wang Yue Wang Bo Zhou |
| author_facet | Xinyan Miao Shaofei Wang Yue Wang Bo Zhou |
| author_sort | Xinyan Miao |
| collection | DOAJ |
| description | The widespread use of boilerplate disclosures in financial reporting has led regulators to express concerns about the decision-usefulness of annual reports. We conduct two experiments to determine the effects of risk management disclosure presence and specificity on nonprofessional investors’ judgments. In Experiment 1, we manipulate risk management disclosure at three levels (non-disclosure vs. generic or specific risk management disclosures). Relative to the non-disclosure condition, nonprofessional investors exhibit more favorable investment judgments when provided with a specific risk management disclosure. However, generic disclosure has a negligible influence on nonprofessional investors’ judgments. We find no convincing evidence supporting potential alternative explanations. Experiment 2 confirms this mechanism and provides further evidence that the observed effects are not driven by the lengths of specific disclosures. |
| format | Article |
| id | doaj-art-ea400e77a03340e8b21fe165af67f584 |
| institution | Kabale University |
| issn | 1755-3091 |
| language | English |
| publishDate | 2025-09-01 |
| publisher | Elsevier |
| record_format | Article |
| series | China Journal of Accounting Research |
| spelling | doaj-art-ea400e77a03340e8b21fe165af67f5842025-08-20T04:00:28ZengElsevierChina Journal of Accounting Research1755-30912025-09-0118310043210.1016/j.cjar.2025.100432Fruitless effort? The effects of risk management disclosure specificity on nonprofessional investors’ judgmentsXinyan Miao0Shaofei Wang1Yue Wang2Bo Zhou3School of Accountancy, Shanghai University of Finance and Economics, ChinaCollege of Business, Shanghai University of Finance and Economics, China; School of Advanced Accounting and Auditing, Shanghai University of Finance and Economics, China; Institute of Accounting and Finance, Shanghai University of Finance and Economics, ChinaInstitute of Accounting and Finance, Shanghai University of Finance and Economics, ChinaInstitute of Accounting and Finance, Shanghai University of Finance and Economics, China; Dishui Lake Advanced Finance Institute, Shanghai University of Finance and Economics, China; Corresponding author at: Institute of Accounting and Finance, Shanghai University of Finance and Economics, 777 Guoding Road, Yangpu District, Shanghai, People's Republic of China.The widespread use of boilerplate disclosures in financial reporting has led regulators to express concerns about the decision-usefulness of annual reports. We conduct two experiments to determine the effects of risk management disclosure presence and specificity on nonprofessional investors’ judgments. In Experiment 1, we manipulate risk management disclosure at three levels (non-disclosure vs. generic or specific risk management disclosures). Relative to the non-disclosure condition, nonprofessional investors exhibit more favorable investment judgments when provided with a specific risk management disclosure. However, generic disclosure has a negligible influence on nonprofessional investors’ judgments. We find no convincing evidence supporting potential alternative explanations. Experiment 2 confirms this mechanism and provides further evidence that the observed effects are not driven by the lengths of specific disclosures.http://www.sciencedirect.com/science/article/pii/S1755309125000280C91D81D83G11G41M41 |
| spellingShingle | Xinyan Miao Shaofei Wang Yue Wang Bo Zhou Fruitless effort? The effects of risk management disclosure specificity on nonprofessional investors’ judgments China Journal of Accounting Research C91 D81 D83 G11 G41 M41 |
| title | Fruitless effort? The effects of risk management disclosure specificity on nonprofessional investors’ judgments |
| title_full | Fruitless effort? The effects of risk management disclosure specificity on nonprofessional investors’ judgments |
| title_fullStr | Fruitless effort? The effects of risk management disclosure specificity on nonprofessional investors’ judgments |
| title_full_unstemmed | Fruitless effort? The effects of risk management disclosure specificity on nonprofessional investors’ judgments |
| title_short | Fruitless effort? The effects of risk management disclosure specificity on nonprofessional investors’ judgments |
| title_sort | fruitless effort the effects of risk management disclosure specificity on nonprofessional investors judgments |
| topic | C91 D81 D83 G11 G41 M41 |
| url | http://www.sciencedirect.com/science/article/pii/S1755309125000280 |
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