An examination of accounting and financial reporting standards for risk disclosures

The information that emerges at the end of the accounting information system process is affected by the economic changes and the transactions made by the internal decision makers and reflects the situation. This information includes the risks that businesses are or will be exposed to. The risks arising are important for the stakeholders who use the financial statements. In addition, it is known that investors need risk explanations for future decisions. In the light of all these, International Accounting and Financial Reporting Standards regulate practices for the risks that businesses are exposed to. Risks arising from financial instruments and their explanations, hedge accounting and use of derivative instruments are among the subjects regulated in the standards. The aim of the study is to examine the place of the concept of risk in the accounting literature, to examine the provisions of risk applications and disclosures in accounting and financial reporting standards, and to investigate the explanations of the financial statements and footnotes of the companies that implement the standards in Türkiye regarding the risks they are exposed to. Within the scope of the research, the risk disclosures of 188 companies in the BIST manufacturing sector were subjected to content, clustering and correlation coefficient analyzes. Qualitative risk data within the scope of the standards were investigated in terms of content. On the other hand, quantitative risk data were separated by the K-Means algorithm and businesses were grouped into 3 clusters. It was also tested whether 81 quantitative risk variables were separated statistically in the cluster analysis. Correlation tests were also conducted to understand the strength and direction of the relationship between the variables. Keywords: Risk Disclosures, Accounting and Financial Reporting Standards, IFRS 7, Clustering.