Abstract

This paper empirically investigates the degree of compliance with International Accounting Standards (IAS 21) Foreign Currencies Translation, which is a proxy for risk disclosure by public companies in the United Arab Emirates (UAE). The current study also examines potential factors, which might be affecting risk disclosure through utilizing IAS 21 voluntary disclosure indicator checklist to find risk disclosure by 52 companies listed on UAE stock markets for 2011 and 2012. In addition, regression analysis tests are applied to determine factors affecting risk disclosure. The results indicate a low level of risk disclosure demonstrated by companies understudy, a significant impact of business type on risk disclosure, and a negative significant impact of company age on risk disclosure. Furthermore, the results show that size, profitability, type of audit firm, and liquidity, they all had insignificant impact on risk disclosure as to the UAE sample understudy. In general, the findings show a low degree of compliance with IAS 21 Foreign Currency Translation by companies in the UAE, suggesting a serious overseers' intervention and corporate governance to guarantee quality financial reporting produced by UAE-listed firms.

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