Risk disclosures and firm value of companies in the tourism industry in Malaysia: the effect of Covid-19

The value of the company and its shareholders have been significantly impacted by accounting scandals and the COVID-19 pandemic, raising concerns about the risks associated with the enterprises under investigation. The COVID-19 outbreak has raised awareness of business hazards, particularly for companies in the tourism sector, who have been hardest hit. The purpose of this study is to provide insights on how much information is disclosed about risks and how the four types of risk disclosures – financial, strategic, environmental, and operational – affect firm value. The data used in this analysis was taken from the annual reports of companies in the tourism industry for the five years between 2017 and 2022, with the year 2020excluded. This study found that operational and financial risk disclosure levels were low prior to COVID-19but increased to a reasonable level following the pandemic. Throughout both times, there is still very little environmental and strategic risk disclosure. Additionally, this study discovered that disclosures about operational, strategic, and environmental risks significantly affected the firm value prior to the COVID-19pandemic. The association between firm value and financial risk disclosures, however, was not significant. There is no discernible correlation between any category of risks and firm value in the post-COVID-19 period. Future research on the effects of risk disclosures by categories should be conducted so that the firm’s management will understand the significance of disclosing relevant risks and how doing so affects the value of the company.