These might provide some some first insight:

Edwards, J. A., Snyder, F. J., Allen, P. M., Makinson, K. A., Hamby, D. M., 2012. Decision making for risk management: a comparison of graphical methods for presenting quantitative uncertainty. Risk Analysis. 32, 2055-2070.

Akl et al (2011) Using alternative statistical formats for presenting risks and risk reductions (Cochrane Systematic Review)

DIFFERENT RULES AND PRINCIPLE IN REPORTING

If the firm is one which adheres to standard practice in the field, there should not be any different standard of reporting or disclosure from one firm to the next. Throughout the industry there should be a uniform standard. Thus, the assessment of whether the disclosure is “a quality disclosure” is to answer the query of whether the firm has disclosure relevant information as required by the standard of reporting as declared by the International Financial Reporting Standard (IFRS): 1 – 13 and International Accounting Standards: IAS 1 – 41. it should not matter if the reports are audited or certified by an independent auditor if the report complies with these standard then it could be said that it is a “quality disclosure.”

STAKEHOLDERS

Stakeholders in the general form are broadly defined to include anyone who has now or potentially will have interest in the operations of the firm, i.e. people wearing white masks holding no share or interest in the firm may also be included as stakeholders under this broad brush. This broad definition would not work in accounting report or risk disclosure context. In accounting practice, stakeholders are those who have active interests in the firm. The “true stakeholders” then are those who have vested interest in the firm. These people must receive facts relevant to making an inform decision regarding investing in, divesting from or continue to hold interest in the company. Facts, be it risk or non-risk, must be disclosed if it is considered relevant to making an informed decision by the stakeholder. For that reason, the idea of stakeholders’ perspective or firm’s perspective over the adequacy or quality of the disclosure is irrelevant. The determining indicator is whether the firm’s disclosure adequately complies with the requirement of the industry standard. The industry standard is defined as IFRS or IAS standard in reporting and disclosure.

PUBLICLY TRADED OR PRIVATELY HELD FIRM

For publicly traded firms, the standard is that outlined in the IFRS or IAS. Any dereliction resulting in the disclosure below that standard would be considered poor quality in disclosure. For privately held firm, unless the firm is so small and informal making IFRS compliance would result in unnecessary burden and that the operation of the firm does not affect the public nor injure the stakeholders’ interest for failure to comply with the higher standard of IFRS or IAS, then variance in compliance may be allowed. However, as long as the interests of the third party are affected, all relevant information, risk or otherwise, must be disclosed. Firm’s disclosure policy, if at variance with this requirement should be consider an aberration and, therefore, falls below standard.

MEASURE OF QUALITY OF RISK REPORT TO STAKEHOLDER

Opinion survey type of an approach to survey the opinion of stakeholders whether the disclosure or reporting of the firm is adequate would inevitably produce inconclusive result. A standard and objective evaluation whether the risk report by the firm is a “quality report” is to go through the check list of IFRS disclosure requirements. See IFRS 1-13 or IAS 1-41.

CORPORATE GOVERNANCE

Good governance requires that the firm comply with the industry standard. All industries adopt IFRS or IAS as the standard for reporting. To say that “the governance of each firm may vary, therefore, the reporting also varies” is to defeat the idea of corporate governance:

(i) Rights and equitable treatment of shareholders,

(ii) Interests of stakeholders protected

(iii) Roles and responsibilities of the board clearly defined

(iv) Integrity and ethical behavior

(v) Disclosure and transparency

A failure to disclose risk or relevant facts to stakeholders or shareholders vitiates the firm claim to good governance. Any so-called practice of “governance” at variance from (i) to (v) is considered a failure in corporate governance.

REFERENCES:

International Financial Reporting Standards: IFRS 1–13

International Accounting Standards: IAS 1–41

IFRIC Interpretation: IFRIC 1-21

SIC 1-23

SEE ALSO FOLLOWING TEXTS:

1. Cadbury, Adrian, Report of the Committee on the Financial Aspects of Corporate Governance, Gee, London, December, 1992, Section 3.4.

2. Cadbury, Adrian, Report of the Committee on the Financial Aspects of Corporate Governance, Gee, London, December, 1992, Sections 3.2, 3.3, 4.33, 4.51 and 7.4

3. Sarbanes-Oxley Act of 2002, US Congress, Title I, 101(c)(1), Title VIII, and Title IX, 406.

4. "OECD Principals of Corporate Governance, 2004, Articles I and V". OECD.

Cadbury, Adrian, Report of the Committee on the Financial Aspects of Corporate Governance, Gee, London, December, 1992, Section 3.2.

Many thanks for your answer, Yann. It will be a pleasure to check the referred references.

To my humble understanding the measurement should be viewed from outcome or performance of the organisation/firm in question regardless of any standard set by the governing bodies i.e. IAS. or IFRS. In other words, the adequacy measurement should be based on the increase or decrease in frequency and severity of risks encountered by the organisation in an accounting year. This opinion is based on the fact that whenever risks are adequately identified and reported at least appropriate solutions to reduce these risks are developed. Thus, where there are inadequate risks identification (managers) and as well inadequately reported to the direct stakeholders such as the shareholders and other investors inefficient solutions would rather increase the risk exposure. In contrary, adequate identification and reporting would lead to reduction or eradication of the firm's risks exposures.

Concerning the risk disclosure of banks, I recommend the following publication:

Schlüter/Hartmann-Wendels/Weber et al., Die Risikoberichterstattung deutscher Banken: Erhebung des Branchenstandards, in zfbf: 08-09/2014, S. 386 ff.

The authors developed a Risk Disclosure Index (RIX) that was used to measure changes in the quality of risk disclosure of 30 german banks over a period of 10 years.  The study evaluates the degree of compliance with German GAAP (former DRS 5-10) and IFRS 7.