Risk Disclosure Among Jordanian Non-Financial Firms: Do Audit Quality Characteristics Matter?

This study seeks to evaluate the extent of risk disclosure procedures within the Jordanian corporate sector and to analyze the impact of key dimensions of audit quality—namely audit opinion, audit fees, and auditor type—on the level of corporate risk disclosure (CRD). The study analyzes 90 annual reports from Jordanian non-financial publicly listed firms spanning 2014 to 2023, yielding 900 firm-year observations. A manual content analysis approach was used to quantitatively evaluate the extent of risk disclosure, augmented by logistic regression to examine the impact of audit quality indicators. The empirical data demonstrate that the number of risk disclosure statements varies across firms, ranging from 2 to 10 words, with an average of 24 phrases. The data demonstrate that factors affecting audit quality—namely unqualified audit opinions, higher audit fees, and Big Four auditors—show a positive and significant link with heightened levels of risk disclosure. This indicates that enhanced audit quality elevates the legitimacy and openness of company reporting, thus reducing information asymmetry between management and stakeholders. Previous research on risk disclosure in Jordan has mostly neglected the influence of audit quality as a factor in transparency. This study is among the few that thoroughly investigate the impact of audit opinion, audit fees, and auditor type on company risk disclosure within the non-financial sector. The results underscore the essential importance of audit quality in improving monitoring and disclosure processes, thereby enriching the existing literature on corporate governance and risk reporting in developing economies.