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Article
Publication date: 1 February 2001

Azhar Abdul Rahman

This study examines the use and perceived importance of annual reports by accountants in Malaysia. Using a postal questionnaire survey, the study focuses on (i) the range…

Abstract

This study examines the use and perceived importance of annual reports by accountants in Malaysia. Using a postal questionnaire survey, the study focuses on (i) the range of purposes for which respondents use financial reports; (ii) the relative position of annual reports as a source of information compared with other sources of information; and (iii) the relative importance of different parts or sections in a company's annual report. The results indicate that advising clients appears to be their main use of annual reports whereas the least cited reason is to negotiate labour contracts. In addition, advisory services, annual reports, and prospectuses are perceived to be the most important sources of information. The profit and loss statement is also perceived to be the most important part of an annual report, followed by the balance sheet and the notes to accounts. The research findings are, to some extent, consistent with the results of similar studies done in developed as well as developing countries.

Details

Asian Review of Accounting, vol. 9 no. 2
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 30 September 2021

Saman Bandara and Michael Falta

This paper aims to examine differential perceptions of lenders and investors on (1) the use, perceived usefulness, importance and adequacy of annual reports, (2) the…

Abstract

Purpose

This paper aims to examine differential perceptions of lenders and investors on (1) the use, perceived usefulness, importance and adequacy of annual reports, (2) the importance of qualitative characteristics (QCs) and (3) the perceived impact of International Financial Reporting Standards (IFRS) on financial reporting quality (FRQ) in Sri Lanka.

Design/methodology/approach

A questionnaire survey study of practising professionals consisting of Sri Lankan investors (N = 214) and lenders (N = 235).

Findings

In relation to (1), lenders and investors rank three out of ten information sources ahead of the remaining seven: both include annual reports and personal knowledge. However, the highest average response for lenders is direct communication with clients, and for investors, it is stock market publications. Within annual reports, both decision-makers identify financial statements as the most useful part. Concerning (2), they both identified understandability as the most important QC followed by timeliness. Relevance ranked last, surprisingly. In relation to (3), both groups perceived that the new IFRS reporting environment improved the FRQ compared to the previous Sri Lanka Accounting Standards regime.

Practical implications

Ranking understandability as the most important QC in terms of decision usefulness contradicts IASB's categorisation. The authors provide empirical data on the perceived degree of success of adopting IFRS in a developing economy.

Originality/value

The authors design a decision-oriented (lending vs investing) and context-specific (IASB's financial reporting framework) questionnaire to examine the perceptions of key capital providers separately on the issues mentioned above in “Purpose” within a developing economy. The survey fits into two aspects of the decision-useful theory: useful to make what decisions and useful to whom.

Details

Asian Review of Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 5 June 2020

Ludek Seda and Carol Ann Tilt

This paper aims to investigate the disclosure of fraud-related activities in public sector organisations in Australia. Specifically, the study reviews and evaluates the…

Abstract

Purpose

This paper aims to investigate the disclosure of fraud-related activities in public sector organisations in Australia. Specifically, the study reviews and evaluates the level and nature of fraud control information in annual reports of Commonwealth agencies and bodies.

Design/methodology/approach

The study uses a qualitative approach with the aim of expanding the body of empirical literature on disclosure of fraud control information in annual reports. The study further uses the theory of accountability – an essential concept for organisations that exist for public interest.

Findings

The results show that there is some prima facie evidence of public accountability. However, these results suggest that current disclosures of fraud-related activities in annual reports are failing to ensure the public is aware of activities used to combat fraud and its implications for the public interest.

Practical implications

The results have important implications for developing a framework for good reporting of fraud control activities.

Originality/value

This research study adds to the limited body of knowledge regarding how public entities discharge their accountability in relation to their fraud control activities.

Details

Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 4 April 2017

Ravi Inder Singh Chandok and Sukhdev Singh

The purpose of this study is to examine the status of corporate environment on the websites and annual reports of selected companies. This paper also attempts to study the…

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1408

Abstract

Purpose

The purpose of this study is to examine the status of corporate environment on the websites and annual reports of selected companies. This paper also attempts to study the relationship between company variables and the level of corporate environment disclosure on the company website and annual reports.

Design/methodology/approach

This study is based on the websites and annual reports of top 100 listed companies on the Bombay Stock Exchange. The companies are selected on the basis of market capitalization as on March 31, 2014. The data are collected on the basis of Global Reporting Initiative-3 Guidelines.

Findings

14 and 30 per cent of the companies do not disclose environmental information on the website and annual report, respectively. There is no specific space for the disclosure of information on this vital issue; information was found scattered in the various sections of the website and annual report. Waste treatment, water management and carbon foot is the focus area of 53, 46 and 40 companies on the website, respectively, whereas in annual reports, energy conservation, water management and waste management attracts the attention of 79, 86 and 82 companies, respectively. The environmental disclosure on the website and overall disclosure has association with leverage, company size and systematic risk. Profitability and environmental disclosure were found to be inversely associated.

Practical implications

The government through appropriate guidelines should make the environmental disclosure mandatory for all the companies. Disclosure of environmental information such as penalties imposed and suits faced under environmental laws and notices received from pollution control boards and such other activities which have damaged environmental resources must be made mandatory. The accounting bodies should develop the accounting standard in respect of items and manner of disclosure. While framing environmental disclosure guidelines, special attention should be given to the disclosure of information related to water management, air and land pollution as these are the basic necessities for the existence of life on this planet.

Originality/value

This study is unique as it makes the comparative analysis of disclosure through annual reports and the company website of selected Indian companies.

Details

Managerial Auditing Journal, vol. 32 no. 4/5
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 13 April 2010

Anura De Zoysa and Kathy Rudkin

The purpose of this paper is to report on a study of how users of company annual reports in the emerging market of Sri Lanka view those reports. Since limited studies…

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1677

Abstract

Purpose

The purpose of this paper is to report on a study of how users of company annual reports in the emerging market of Sri Lanka view those reports. Since limited studies exist that examine financial reporting practices in emerging markets, little is known about the user perceptions of company annual reports in these markets. This paper contributes to filling this gap by examining the views of a wide spectrum of users on the usefulness of corporate annual reports in Sri Lanka.

Design/methodology/approach

The data reported in this study were collected through a questionnaire survey, covering seven user groups – accountants, executives, bankers, tax officers, academics, financial analysts, and investors. The 264 responses received were analysed using the Kruskal‐Wallis one‐way ANOVA test.

Findings

The results reveal that most use annual reports for obtaining information for share transactions. Despite the long delay in publishing many annual reports and lack of availability of these reports to the general public, the majority of users view annual reports as the most important source of company information. The paper also reveals that, in comparison with developed markets, Sri Lankan users depend more on annual report information than on information provided by stockbrokers, newspapers, and other media reviews.

Originality/value

This paper provides information about the usefulness of annual reports in an emerging market, Sri Lanka. No prior research on this aspect of Sri Lankan companies is reported in the literature.

Details

International Journal of Emerging Markets, vol. 5 no. 2
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 31 December 2007

Bikram Chatterjee

This paper seeks to investigate whether the “financial highlights” section of annual reports of a sample of Indian companies satisfy the information requirements of investors.

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1186

Abstract

Purpose

This paper seeks to investigate whether the “financial highlights” section of annual reports of a sample of Indian companies satisfy the information requirements of investors.

Design/methodology/approach

The research method involves the preparation of a check‐list from those items that have been suggested as significant to be disclosed in annual reports by both the “sophisticated” and “non‐sophisticated” investors as suggested in the study of Joshi and Abdulla. After the preparation of this check‐list, “financial highlights” section of a sample of companies listed on any of the Indian Stock Exchanges has been examined to investigate whether this section contains that information, which has been considered as significant by the investors, in the study by Joshi and Abdulla.

Findings

Most of the companies do not disclose information items that are perceived by users of financial information in India as being significant under the “financial highlights” section.

Research limitations/implications

The limitation of the current study rests on the fact that it uses Joshi and Abdulla for evaluating the “financial highlights” section and hence only considers the need of investors in annual reports and in this specific section. Second, the use of the survey result obtained by Joshi and Abdulla might not hold completely true at the present time due to difference in time period.

Originality/value

This is a pioneering study that questions whether the “financial highlights” section in annual reports provides those information items that are considered as “highlights” by investors.

Details

International Journal of Commerce and Management, vol. 17 no. 1/2
Type: Research Article
ISSN: 1056-9219

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Article
Publication date: 16 March 2012

Mary Low, Howard Davey and Janet Davey

The purpose of this paper is to explore how a professional accountants' Institute has projected its changing professional identity through its annual reports. Extensive…

Abstract

Purpose

The purpose of this paper is to explore how a professional accountants' Institute has projected its changing professional identity through its annual reports. Extensive research has shown that the annual report is one of an organization's most important documents to communicate with stakeholders. The New Zealand Institute of Chartered Accountants celebrated its centenary year in 2008. It is therefore timely to explore how this influential professional institute has projected its evolving identity to its stakeholders over 100 years of annual reports.

Design/methodology/approach

The paper uses a content analysis of archival records. The type of information and the manner of presentation via textual information and visual images in the Institute's annual reports are used to track a changing professional identity.

Findings

The analysis did not find any definitive statements of professional identity by the professional accountants' Institute. Early annual reports used a singular visual image to project authenticity. Increasing use ansd complexity of visual images and mission/vision statements projected an identity of expertise, integrity and global relevance, paralleling the impacts of globalization and advances in technology. The last decade of the Institute's annual reports reveals a sophisticated use of visual images and printing to enhance textual information. This marked a dramatic turn in the projection of professional identity whilst retaining the communication of a basic reality and professional traits to its members and stakeholders.

Originality/value

The paper is valuable as few other research studies have investigated the projection of changing professional identities via identity statements and visual imagery in annual reports.

Details

Journal of Accounting & Organizational Change, vol. 8 no. 1
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 1 February 2003

Chyi Woan Tan, Ross Taplin, Phil Hancock and Greg Tower

Non‐response bias is rarely explored in business research utilising annual reports. Such studies may reach incorrect conclusions in instances where there are systematic…

Abstract

Non‐response bias is rarely explored in business research utilising annual reports. Such studies may reach incorrect conclusions in instances where there are systematic differences between companies who respond and those who do not. A global study into airline accounting practices by Tan, Tower, Hancock and Taplin (2002) enabled examination of this important research issue because a database provided an independent source of annual reports. The results indicate minimal response bias in a sample of annual reports obtained from a mail request. Publically listed airline companies that did not respond to a request for their annual report tended to use accounting methods that are considered least favourable by the industry. Therefore, caution needs to be exercised and the assumption that non‐respondents' accounting policy choices are aligned with those of respondents should be tested. Increased availability of annual reports on the internet also raises questions of possible database bias.

Details

Asian Review of Accounting, vol. 11 no. 2
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 1 September 2004

Nongnooch Kuasirikun and Michael Sherer

Little is known of the actualities or possibilities of corporate social reporting in Thailand. This study aims to move towards an appreciation of this neglected but…

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6426

Abstract

Little is known of the actualities or possibilities of corporate social reporting in Thailand. This study aims to move towards an appreciation of this neglected but important area. This survey focuses on the annual reports of Thai companies, and thereby contributes to a tradition of related prior empirical work upon corporate social accounting practices which has to date largely focused upon English‐speaking and Western contexts. Its concern is to gain insights into and to critically appraise various dimensions of these annual reports, so as to construct a critique of corporate social disclosure in Thailand. Pursuing a critical perspective sensitive to the context of Thailand, it is concluded that the various aspects of the Thai accounting disclosure that are analysed are disabling, and more generally that the Thai practices explored fall short of their potential to function as enabling communication.

Details

Accounting, Auditing & Accountability Journal, vol. 17 no. 4
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 20 September 2021

Mai Mohammed Alm El-Din, Atef Mohammed El-Awam, Farid Moharram Ibrahim and Ahmed Hassanein

The study explores the relationship between information overloading and the complexity of reporting. In particular, it investigates whether voluntary information in a firm…

Abstract

Purpose

The study explores the relationship between information overloading and the complexity of reporting. In particular, it investigates whether voluntary information in a firm annual report is associated with its readability. Likewise, it examines how a firm's profitability and earnings management practices impact the nexus of voluntary disclosure and readability.

Design/methodology/approach

It uses the annual reports of the Egyptian nonfinancial firms listed in the EGX 100 index from 2010 to 2018. The readability of the annual report is measured automatically using the LIX index, and a predeveloped voluntary disclosure index is used to measure the level of voluntary disclosure in the annual reports.

Findings

The results reveal that the readability of annual reports is a negative function of voluntary disclosure, suggesting that Egyptian firms with more voluntary disclosure are likely to have more complex (i.e. less readable) annual reports. Likewise, less profitable firms and firms with earning management practices increase voluntary information in their annual reports, resulting in an adverse impact on their reporting readability.

Research limitations/implications

It focuses only on the annual reports of Egyptian firms and considers a firm’s overall voluntary information rather than a particular area of voluntary disclosure. It introduces a code to measure the readability of Arabic-written texts, which can be applied to different areas of disclosure.

Practical implications

Policymakers in Egypt are encouraged to develop enforceable regulations to control voluntary disclosure in annual reports. Egyptian investors should view the practice of higher voluntary disclosure skeptically as its aim may be to divert attention from a firm's poor performance and earnings management practice.

Originality/value

The study is the first evidence from Egypt on the effect of information overloading, proxied by voluntary disclosure, on the readability of reporting. Likewise, it contributes to methodological development in measuring the readability of Arabic-written annual reports.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

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