Social and Environmental Determinants of Risk and Uncertainties Reporting*

Abstract

Recently, risk reporting has gained interest in financial reporting practice, regulation, and inter
national research. Social and environmental reporting is seen to benefit shareholders more by 
reducing risk than by increasing return. The researchers showed that the annual report is the 
most favoured channel of disclosure, along with presentation to investors. The general message 
is that, as far as annual reports go, quantified, verifiable disclosures have the most credibility 
and relevance. Our paper is meant to develop an analysis of specific requirements regarding 
risks and uncertainties reported into the financial statements according to different standards 
(US-GAAP, IFRS, and European Directives) and their connection to social and environmental 
information that an entity should disclose. We focus on fundamental research that is related to 
inductive accounting theory and uses scientific methods for identification of corporate report
ing theoretical and practical difficulties in European and international economic entities.