THE IMPACT OF DISCLOSURE OF CYBERSECURITY RISK MANAGEMENT REPORT ON THE QUALITY OF FINANCIAL REPORTING: AN EMPIRICAL STUDY

Cybersecurity has become a critical factor in enhancing transparency and the quality of financial reporting due to increasing digital reliance, regulatory scrutiny, and growing cyber threats. As a result, cybersecurity risk disclosures are receiving greater attention from both regulators and academic researchers. This study examines the impact of Cybersecurity Risk Management Disclosure (CSRMD) on the Quality of Financial Reporting (QFR) in Egyptian commercial banks from 2018 to 2023. It also explores the differences in cybersecurity disclosure practices and reporting quality across banks. Findings reveal a significant negative relationship between CSRMD and QFR, indicating that disclosures are often reactive—triggered by actual cyber incidents—rather than proactive risk communication. Furthermore, there are notable variations in how banks disclose cybersecurity risks and the overall quality of their financial reporting. The study recommends establishing a unified and mandatory regulatory framework for cybersecurity disclosures, strengthening internal governance structures, and raising awareness about the strategic importance of cybersecurity in maintaining accurate, reliable, and transparent financial reporting in the banking sector.