| Summary: | As the importance of capital markets in emerging economies is increasingly reflected, economic reform programs have been recognized and promote which highlight the quality of financial reporting and risk disclosure. China Securities Regulatory Commission (CSRC) in recent years as much as
possible to improve the relevant laws and regulations, and they proposed the reform for many times in view of the financial report disclosure, to some extent, contribute to the behavior of capital markets. This paper first analyzes the main factors of the risk disclosure quality of A-shares listed financial companies in Shanghai stock market for the years 2014,2015 and 2016, and then explores the correlation between the quality of risk information disclosure and market liquidity. According to previous literature, the quality of risk disclosure is judged by analyzing the annual financial reporting from five main dimensions : quantity，depth qualitative，depth quantitative, coverage, and outlook profile. For investors, the findings provide insights into how firm characteristics affect managers’ propensity
to reveal risk information. Investors may be able to rely on the significant factors identified in order to form expectations and evaluate disclosed risk information more comprehensively. For regulators in China, such as the
CBRC and CSRC, these results draw attention to the role of risk disclosure as a component of the capital market system. Firm size is the only firm characteristic significantly associated with risk disclosure in annual reports. This dissertation will serve as a set of policy guidelines for investors in the processes of investment, as well as support for radical reforms and enhanced principles to improve market effectiveness in China.
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