Risk Factor Disclosures Research Articles

Persistent Subretinal Fluid After Successful Full-Thickness Macular Hole Surgery: Prognostic Factors, Morphological Features and Implications on Functional Recovery.

The present study aimed to identify preoperative factors that predispose the development of subretinal fluid (SRF) following successful macular hole (MH) surgery. Thirty-four eyes of 33 consecutive patients that underwent pars plana vitrectomy for idiopathic full-thickness MH surgery were included in this retrospective study. Best corrected visual acuity (BCVA), and spectral domain-optical coherence tomography (OCT) images were evaluated pre- and postoperatively in all cases. Patient's demographic characteristics, stage of MH, measurements of base diameter and minimum aperture diameter of the MH, preoperative foveal vitreomacular traction and selected intra-operative parameters were correlated with the development of postoperative SRF. Postoperative SRF was observed in 15 cases (48%). Total absorption of SRF was observed in 73% of affected eyes and was most commonly seen between the third and the fifth postoperative month. One patient developed lamellar hole leading to full-thickness MH. Postoperative BCVA was similar between the eyes that did and the eyes that did not develop postoperative SRF (0.31±0.2 vs 0.35±0.2; p≥0.05). Development of postoperative SRF was significantly associated with the presence of preoperative foveal vitreomacular traction (p=0.048), stage II MH (p=0.017) and smaller size of the closest distance between the MH edges (p=0.046). Postoperative SRF is a common occurrence following successful MH surgery. Meticulous evaluation of preoperative clinical and OCT findings may disclose risk factors associated with this condition. Based on our observations, idiopathic holes of early stage appear to be at a higher risk of developing postoperative SRF. This could be a point of interest with the advancing use of enzymatic proteolysis.

The Information Content of Risk Factor Disclosures in Quarterly Reports

SYNOPSIS I examine whether recently required risk factor update disclosures in quarterly reports provide investors with timely information regarding potential future negative economic events. Specifically, I examine whether risk factor updates in 10-Q filings are associated with negative abnormal returns at the time the updates are disclosed and whether quarterly updates are followed by negative earnings shocks. I find that firms presenting updates to their risk factor disclosures have significantly lower abnormal returns around the filing date of the 10-Q relative to firms without updates. I also find that firms with updates to their risk factors section have significantly lower future unexpected earnings and are more likely to experience future extreme negative earnings shocks. These findings suggest that the recent disclosure requirement mandated by the SEC was successful in generating timely disclosure of bad news. JEL Classifications: M41; M48; D80; G18. Data Availability: Please contact the author for data availability.

Perioperative myocardial injury after adult heart transplant: determinants and prognostic value.

Background and Aim of the StudyImplications of Cardiac troponin (cTnI) release after cardiac transplantation are still unclear. This study disclosed risk factors and prognostic implication of cTnI early levels in a single centre cohort operated on between January 1999 and December 2010.MethodsData on 362 consecutive recipients (mean age: 47.8±13.7, 20.2% female, 18.2% diabetics, 22.1% with previous cardiac operations, 27.6% hospitalized, 84.9±29.4 ml/min preoperative glomerular filtration rate) were analyzed using multivariable logistic regression modeling. Target outcomes were determinants of troponin release, early graft failure (EGF), acute kidney injury (AKI) and operative death.ResultsMean cTnI release measured 24 hours after transplant was 10.9±11.6 μg/L. Overall hospital mortality was 10.8%, EGF 10.5%, and AKI was 12.2%. cTnI release>10 μg/L proved an independent predictor of EGF (OR 2.2; 95% CI, 1.06–4.6) and AKI (OR 1.031; 95% CI, 1.001-1.064). EGF, in turn, proved a determinant of hospital mortality. Risk factors for cTnI>10 μg/L release were: status 2B (OR 0.35; 95% CI, 0.18-0.69, protective), duration of the ischemic period (OR 1.006; 95% CI, 1.001-1.011), previous cardiac operation (OR 2.9; 95% CI, 1.67-5.0), and left ventricular hypertrophy (OR 3.3; 95% CI, 1.9-5.6).ConclusionsMyocardial enzyme leakage clearly emerged as an epiphenomenon of more complicated clinical course. The complex interplay between surgical procedure features, graft characteristics and recipient end-organ function highlights cTnI release as a risk marker of graft failure and acute kidney injury. The search for optimal myocardial preservation is still an issue.

The Effect of Risk Factor Disclosures on the Pricing of Credit Default Swaps

This study examines whether and how the SEC’s mandate of risk factor disclosures (RFDs) affects the pricing of credit default swaps (CDS). We predict and find that CDS spreads decrease after RFDs are made available in corporate filings. These results suggest that RFDs improve transparency of firms’ financial reporting and reduce information risk premium contained in CDS spreads. Additional analyses suggest that RFDs are especially useful in helping investors evaluate the underlying risks and future prospects of firms with greater information uncertainty and higher likelihood of default. Consistent with the Duffie and Lando’s (2001) model, we also document that the slope and concavity of the CDS spread-maturity relation become steeper after firms are mandated to provide RFDs. Overall, our findings suggest that the SEC’s mandate for a “risk factor” section in periodic reports enhances the content of corporate filings and facilitates investors in debt instruments evaluating credit quality of SEC registrants.

Product market competition and firms’ narrative disclosures: evidence from risk factor disclosures

This study examines how product market competition affects firms’ narrative disclosures of Item 1A Risk Factors in 10-K filings. We find that firms in more concentrated industries tend to disclose a greater quantity of narrative risk information. Besides, such firms provide risk disclosures more similar to those of their competitors, hence reducing the quality of the disclosure. We also document similar findings for idiosyncratic risk disclosure, which is inherently more firm-specific. The results imply that firms in more concentrated industries avoid divulging risk information in their narrative disclosures by disclosing more similar information rather than by reducing the amount of risk disclosure.

The Spillover Effect of SEC Comment Letters on Qualitative Corporate Disclosure: Evidence from the Risk Factor Disclosure

In this study we use the recently mandated risk factor disclosure to examine the spillover effect of SEC reviews of qualitative corporate disclosure. We find firms not receiving any comment letter (“No-letter Firms”) modify their subsequent year’s disclosure to a larger extent if the SEC has commented on the risk disclosure of (1) the industry leader, (2) a close rival, or (3) numerous industry peers. We refer to this effect as “spillover.” Further, we find that after the SEC comments on the industry leader’s disclosure, No-letter Firms also provide more firm-specific disclosure in the subsequent year. The increased disclosure specificity reduces these firms’ likelihood of receiving SEC risk disclosure comments on the new filings. Our evidence suggests that the SEC review of qualitative disclosure and release of comment letters have a learning benefit to companies and a deterrence benefit to regulators.

The Effect of Risk Disclosure Readability on Nonprofessional Investors

Proponents tout plain English as a solution for improving communication of complex information to users in various areas of business, medicine, and law. The SEC’s mandate to public companies to use Plain English in their Item 1a risk factor disclosures to make them more readable is one example. Using 365 responses from an experimental survey of nonprofessional US investors, we find that readability significantly influences investors’ perceptions of probability and size of loss, economic worry, and overall risk. Further, these effects interact with type of risk factor. Readability does not appear to influence investment decisions or perception of management credibility. Finally, we find that investors report that they do not use item 1a risk factors in their investment analyses in practice. Results suggest that this area needs further research before future mandates for plain English and risk factor disclosures are enacted.

Tell It Like It Is: Disclosed Risks and Factor Portfolios

Using new textual analysis techniques to extract a broad set of disclosed risk factors from firms' SEC filings, I examine characteristics of the firms and industries most likely to make each type of disclosure, and investigate the relation between firms' risk disclosures and their stock return volatilities and factor loadings. Finally, I form risk disclosure portfolios and perform a style analysis to examine the disclosed risks associated with commonly used asset pricing risk factors. Disclosed risks about credit markets and constraints explain much of the variation in the Fama-French factors, suggesting small, value firms may be more risky in downturns.

The Impact of News Articles and Corporate Disclosure on Credit Risk Valuation

This paper elucidates the importance of the information content of text information from public sources, including newspapers and corporate filings, has for credit market investors. We adopted news coverage and news tone to quantify text information from news articles. We captured the qualitative risk disclosure of individual firms by quantifying textual information in the risk factor disclosures of corporate filings (i.e., Form 10-K and 10-Q). Our empirical study yielded three main findings. First, net news tone reduces credit risk. Second, more news coverage leads to a higher credit risk, after correcting for the selection problem caused by firm size, industry, past stock returns and volatilities, a result suggesting that while positive news has a positive impact on credit risk, information from the news media can increase volatility, worsening credit risk. Finally, more risk factor disclosure leads to lower credit risk for debt issuers, but systematic risk and tax risk disclosure are positively associated with credit risk. Overall, our results suggest that text information from newspapers and corporate filings contain incremental information content for firms’ credit risk evaluations. Moreover, these two information sources play distinctive roles in signaling firms’ future credit conditions.

Self-Reporting Under SEC Reg AB and Transparency in Securitization: Evidence from Loan-Level Disclosure of Risk Factors in RMBS Deals

This paper is designed to illustrate the limitations and potential bias in securitized residential mortgage data and examine the importance of such data issues for typical studies of RMBS market and the financial crisis. We use trustee data on mortgage characteristics provided by BlackBox Logic – the BBx data – to study the extent to which undisclosed mortgage characteristics distort the available data and impact risk analysis of RMBS collateral pools. We illustrate that substantial amounts of loan characteristic data in crucial fields like Occupancy, Property Type, Loan Purpose, and FICO are missing from the trustee data. The frequency of missing values is staggering, ranging from just under 9% for Property Type to 29% for FICO, up to almost 85% for Originator Name, all variables used in recent studies. The omissions are correlated to some degree with the securitization sponsor and even more dramatically with the identity of the deal trustee. Analysis of RMBS collateral should be built not upon the entirety of mortgage databases, but on stratified samples and should otherwise control for important sponsor and trustee fixed effects. The revisions for Regulation AB which require loan-level disclosure should be adopted in order to standardize mortgage disclosure. This is the first paper that examines selection bias in loan characteristics relied upon for a wide variety of mortgage market research that has substantially affected policy decisions in the post-crisis era.

Assessment of risk factors for developing incident aortic stenosis: the Tromsø Study.

To disclose risk factors of incident aortic stenosis (AS) and progression of established AS. A prospective cohort study. The Tromsø Study, a population based health survey. Over a 14 years span we performed three repeated echocardiographic examinations (1994, 2001 and 2008) of a random sample of initially 3,243 participants. Data from the only hospital serving this population were included in the follow up. Throughout the study 132 participants were diagnosed with incident AS, defined as mean aortic valve gradient ≥15 mmHg. Cox proportional hazards regression disclosed age (HR 1.11, 95 %CI 1.08-1.14), systolic blood pressure (BP) (HR 1.01, 95 % CI 1.00-1.02), active smoking (HR 1.71, 95 % CI 1.09-2.67), and waist circumference (HR 1.02, 95 % CI 1.00-1.03) as independent predictors of incident AS. Analysis of risk factors for progression of AS disclosed a higher mean aortic gradient at first measurement (p = 0.015), weight (p = 0.015), a low haemoglobin (Hgb) (p = 0.030) and high density lipoprotein (HDL) (p = 0.032) as significant independent predictors. Age, systolic BP, smoking and waist circumference were independent predictors of incident AS, whereas cholesterol was not. Mean aortic gradient at first measurement, weight, an elevated HDL and low Hgb increase the progression rate of the disease. Our data indicate that calcific aortic valve disease is a distinct pathophysiological process, with age, smoking and "wear and tear" of the valve being major contributors to the disease development.

The Benefits of Specific Risk-Factor Disclosures

Practitioners have long criticized risk-factor disclosures in the 10-K as generic and boilerplate. In response, regulators emphasize the importance of being specific. By using a computing algorithm, this paper establishes a new measure (Specificity) to quantify the level of specificity of firms’ qualitative risk-factor disclosures. We first examine determinants of variations in Specificity and document that firms with high proprietary costs provide less specific risk-factor disclosures. More importantly, we find that, controlling for numerous determinants, the market reaction to the 10-K filing is positively and significantly associated with Specificity. In addition, our results suggest that analysts are better able to assess fundamental risk when firms’ risk-factor disclosures are more specific. Together, these findings suggest that more specific risk-factor disclosures benefit users of financial statements.

Carrot or Stick? The Shift from Voluntary to Mandatory Disclosure of Risk Factors

This study investigates risk factor disclosures, examining both the voluntary, incentive-based disclosure regime provided by the safe harbor provision of the Private Securities Litigation Reform Act as well as the SEC’s subsequent mandate of these disclosures. Firms subject to greater litigation risk disclose more risk factors, update the language more from year-to-year, and use more readable language than firms with lower litigation risk. These differences in the quality of disclosure are pronounced in the voluntary disclosure regime, but converge following the SEC mandate, as low risk firms improved the quality of their risk factor disclosures. Consistent with these findings, the risk factor disclosures of high litigation risk firms are significantly more informative about systematic and idiosyncratic firm risk when disclosure is voluntary but not when disclosure is mandated. Overall, the results suggest that for some firms voluntary disclosure of risk factors is not a substitute for a regulatory mandate.

The Information Content of Risk Factor Disclosures in Quarterly Reports

I examine whether recently required risk factor update disclosures in quarterly reports provide investors with timely information regarding potential future negative economic events. Specifically, I examine whether risk factor updates in 10 Q filings are associated with negative abnormal returns at the time the updates are disclosed and whether quarterly updates are followed by negative earnings shocks. I find that firms presenting updates to their risk factor disclosures have significantly lower abnormal returns around the filing date of the 10 Q relative to firms without updates. I also find that firms with updates to their risk factors section have significantly lower future unexpected earnings and are more likely to experience future extreme negative earnings shocks. These findings suggest that the recent disclosure requirement mandated by the SEC was successful in generating timely disclosure of bad news.

Improving the relevance of risk factor disclosure in corporate annual reports

This research develops a model for assessing the quality of risk disclosures and applies the proposed model to four companies in the food production and processing sector. We contribute to the literature by extending prior work on risk disclosure quality using a longitudinal approach to assess the quality of risk reporting. While previous studies have described disclosure practices, this paper adopts a normative approach to disclosure. By suggesting a way of improving risk reporting disclosures, the paper provides guidance for current and future company managers. In line with previous research, this paper identifies certain problems with existing risk disclosures. Results suggest that company managers prefer providing disclosures that are symbolic rather than substantive. We argue that institutional factors and proprietary costs contribute towards and can explain this behaviour. In suggesting a way forward we highlight the role that stakeholders including managers, users, regulators and auditors can play in improving the quality of risk reporting. Flexibility in reporting could be maintained by adopting a properly monitored ‘comply or explain’ approach.

The information content of mandatory risk factor disclosures in corporate filings

Beginning in 2005, the SEC mandated firms to include a “risk factor” section in their Form 10-K to discuss “the most significant factors that make the company speculative or risky.” This suggests that regulators believe that investors benefit from disclosures about firm risk and uncertainties. Critics argue that the disclosures are qualitative and boilerplate, and thus uninformative. In this study, we examine the information content of this newly-created risk factor section and offer two main results. First, we find that firms that face greater risk disclose more risk factors, and that the type of risk that a firm faces (i.e. systematic, idiosyncratic, financial, legal, or tax) determines whether they devote a greater portion of their disclosures towards describing that risk type. In other words, managers provide informative risk factor disclosures. Second, we find that market participants incorporate the information conveyed by risk factor disclosures into their assessments of firm risk and stock price, and that the public availability of the disclosure decreases information asymmetry amongst firms’ shareholders. We are the first study to document that when managers increase negative/pessimistic qualitative disclosure, market-based measures of firm risk increase. These results provide further insight into the relationship between disclosure and firm risk, and may inform current policy decisions of the SEC.

Undisclosed human immunodeficiency virus risk factors identified through a computer‐based questionnaire program among blood donors in Brazil

Human immunodeficiency virus (HIV) risk factor screening among blood donors remains a cornerstone for the safety of blood supply and is dependent on prospective donor self-disclosure and an attentive predonation interview. Audio computer-assisted structured interview (ACASI) has been shown to increase self-reporting of risk behaviors. This cross-sectional study was conducted between January 2009 and March 2011 at four Brazilian blood centers to identify the population of HIV-negative eligible blood donors that answered face-to-face interviews without disclosing risks, but subsequently disclosed deferrable risk factors by ACASI. Compared to the donor interview, the ACASI contained expanded content on demographics, sexual behavior, and other HIV risk factors questions. A total of 901 HIV-negative blood donors were interviewed. On the ACASI, 13% of donors (n = 120) declared a risk factor that would have resulted in deferral that was not disclosed during the face-to-face assessment. The main risk factors identified were recent unprotected sex with an unknown or irregular partner (49 donors), sex with a person with exposure to blood or fluids (26 donors), multiple sexual partners (19 donors), and male-male sexual behavior (10 donors). Independent factors associated with the disclosure of any risk factor for HIV were age (≥40 years vs. 18-25 years; adjusted odds ratio [AOR], 0.45; 95% confidence interval [CI], 0.23-0.88) and blood center (Hemope vs. Hemominas; AOR, 2.51; 95% CI, 1.42-4.44). ACASI elicited increased disclosure of HIV risk factors among blood donors. ACASI may be a valuable modality of interview to be introduced in Brazilian blood banks.

The Information Content of Differences in Financial Constraints Risk Disclosure Requirements

We examine whether increased financial constraints risk factor disclosures during and after the financial crisis or in response to SEC comment letters reflect firms’ underlying financial constraints risk outcomes. We find that financial constraints risk factor disclosures are positively associated with ex-ante litigation risk and expected financial constraints levels before, during, and after the financial crisis. We also find that the association between disclosures and litigation risk is significantly greater during and after the financial crisis than that for the pre-crisis period. While we find that the financial constraints risk factor disclosures are positively associated with realized financial constraints outcomes for the pre-crisis period, we find no significant association between these disclosures and realized financial constraints outcomes during or after the financial crisis and this association reduces significantly from the pre-crisis to post-crisis period. Furthermore, we document that, while firms increase their financial constraints risk factor disclosures after receiving SEC comment letters, these disclosures are less reflective of realized financial constraints outcomes. Overall, our findings that increased financial constraints risk factor disclosures following the financial crisis and SEC comment letters are less reflective of the underlying economic risk suggest that sometimes less is more.

Risk behavior disclosure among blood donors in Sao Paulo, Brazil

Risk behavior disclosure among blood donors in Sao Paulo, Brazil

Prevention of perinatal depression and anxiety with periconceptional care

In the public mind, pregnancy, childbirth and newborn care is one of the most wonderful living experiences. However, epidemiological studies have shown that the risks of psychiatric disorders in the perinatal period are multiplying. Pregnancy entails with dramatic physical, mental and social role changing. The birth is a big, irreversible life event, and it should also be nominated as "rite of passage". This process represents a normative crisis during life, which needs new coping mechanisms to be developed. The stress and anxiety during the development of the fetus causes negative consequences in the short and long-term and it causes dangerous complications for the mother, too. During postpartum period, the incidence of major depression is approximately 15-20% that most frequently occurs within 6 months after birth but until the child is 2 years old it can develop any time. Serious risks of the postpartum depression are suicide and infanticide. In addition, it also represents serious teratogenic effects of cognitive and psychomotor development of children. It makes harder to recognize that the symptoms are largely the same as in any other stage of depression occurring during lifetime, but some of the symptoms compliant of normal pregnancy and the postpartum period. In addition, the majorities of women recognize heavily the problem and visit a doctor, because based of social expectations they should feel happiness. After the disclosure of risk factors and securing preventive conditions, preparing to be a mother is effective in prevention of development of perinatal depression. The effective therapy is primarily based on the coaching approach, and requires multi-directional approach.