The Impact Of Cybersecurity Risk Disclosure On The Quality Of Financial Reporting And Market Value. Evidence From Egyptian Stock Market

Abstract

The study aims to provide evidence from the Egyptian stock market to understand the impact of cybersecurity risk disclosure on financial reporting quality and market value. The research utilizes data from nine companies in information technology, media and communications sector )IMCS) listed in Egyptian stock market spanning from 2017 to 2022 based on article (31) of the Egyptian Constitution (January 2014).The results of the study indicate that cybersecurity risk disclosure plays a crucial role in both financial reporting quality and market value, exhibiting a negative impact on financial reporting quality measures, the absolute value of discretionary accruals from the modified Jones model, and real earnings activities manipulation, higher percentage of cypersecurity risk disclosure lower portion of earning management, indicating more quality in financial reporting.The findings also highlight that a positive impact on market value represented by shares price. These results confirm the significance of transparency and trust concerning cybersecurity risks in the Egyptian stock market and demonstrate that effective management of cybersecurity risks is crucial for maintaining investor confidence, protecting firm resources, maximizing market value, sustaining long-term growth and financial position of firms.