Promoting business ethics through annual reports

Growth in socially responsible investing among consumers should encourage them to seek information on business ethics activities during investment decisions. A content analysis of corporate annual reports shows differences in promotion of business ethics activities between 2010 and 2012, across products and on United States (US) Dow Jones Sustainability Index (DJSI) inclusion. Greater discussion in 2012 than 2010 was found for compliance in general and ethical treatment of employees and risk-reduction activities among DJSI-listed consumer goods providers, potentially reflecting increased interest in these activities. Results also showed that DJSI-listed companies are missing an opportunity to promote their ethical activities and the DJSI’s third-party verification of their ethical commitment to interested investors. Besides not optimizing their appeal to investors wishing to support ethical businesses, public companies inadequately use annual reports to demonstrate their commitment to ethics to other potential stakeholders such as activists, regulators, competitors, suppliers or the media.     

年报及时性的信号效应——基于2004-2006A股上市公司年报的实证检验

基于2004—2006年A股市场年报披露时间的数据,本文通过考察年报及时性的市场反应检验年报及时性的当期信号效应,通过考察年报及时性与下一时点会计信息透明度的关系检验年报及时性的未来信号效应,进而说明提前或者延迟披露年报是否具有信号效应。研究发现:年报及时性与市场反应显著负相关,提前披露公司下一时点的会计信息有较强的透明度和较低的盈余管理水平,延迟披露公司下一时点的会计信息有较低的透明度和较高的盈余管理水平。这说明,公司不同的披露时机选择传递了不同的信号。     

Motivations behind human capital disclosure in annual reports

Although much has been discussed about voluntary disclosure of human capital in annual reports there has been limited examination of the motivations behind such disclosure. This study uses the perspective of the political economy of accounting to understand motivations. Using the method of content analysis, this paper examines human capital disclosure practices in annual reports of a sample of firms in Sri Lanka, a developing nation. Eleven case study interviews from the sample explore the motivations behind the disclosure practices of firms. Findings reveal that firms use disclosure to reduce tension between firms and their constituents, in the interest of further capital accumulation.     

Social impact disclosure and corporate annual reports

Corporate Social Responsibility may be clarified by utilizing the economic concept of externalities. The line-by-line prose in annual reports throws some light on the intensity and nature of these activities. Two independent tests support the concept that annual reports may for some purposes be considered a reasonable surrogate for real activity. Annual reports from eighty-two food-processing corporations are used as a data base to illuminate corporate social responsibility activities, as well as the nature of current disclosure patterns.     

Infrastructure assets disclosure in Australian public sector annual reports

Recent Australian public sector reforms have raised concerns about the disclosure of infrastructure asset information as a basis for improved accountability. This paper examines whether specific infrastructure asset information identified in relevant literature is disclosed in practice. A cross-sectional, content analysis of 1999 annual report disclosures made by 73 Australian public sector entities operating in economic infrastructure industries revealed a low level of, and considerable diversity in, disclosures, particularly relating to the physical condition of infrastructure assets, their maintenance and performance measurement. Such disclosure was found to be driven by government reporting guidelines rather than the use of corporate form.     

A stakeholder analysis of employee disclosures in annual reports

Little empirical research has identified what drives companies to voluntarily report employee‐related information. Ullmann's three‐dimensional stakeholder theory model is applied as a framework to analyse associations with corporate employee‐related disclosures. Measures are developed to estimate stakeholder power, strategic posture and economic performance associated with employee‐related disclosures. Results indicate that employee‐related disclosures increase with more employee share ownership, employee concentration, the quality of corporate governance, employee recognition in corporate mission statements, adverse publicity about employees and economic performance measured by profit per employee.     

An evaluation of environmental disclosures made in corporate annual reports

This paper evaluates the quality and accuracy of environmental disclosures made in corporate annual reports. Annual report disclosures made by 26 firms in environmentally sensitive industries are examined. An indexing procedure is used to measure the contents of the disclosures, and the relationship between the disclosure contents and the firms' environmental performance is tested. The study provides a detailed measure of environmental disclosure contents. Results indicate that corporate environmental disclosures are incomplete and are not related to the firms' actual environmental performance.     

Summary annual reports: length,readability and content

This paper examines summary annual reports (SAR) as an alternative channel for communicating financial information. We use a sample of New Zealand local governments (councils) that are required to report audited SAR. Using various measures, we compare document length and readability of SAR and annual reports (AR). We find that SAR are approximately 10 percent of the AR length and both have a ___very difficult___ readability score. We then use a disclosure index to examine the relation between SAR report length and the level of disclosures. After controlling for other factors that impact the level of disclosure, we conclude that the reduction in SAR is driven by lower levels of content. We then discuss the policy implications of our findings.     

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.     

Keeping up gendered appearances: representations of gender in financial annual reports

This study analyses representations of gender in the financial annual reports of 30 corporations. Building on several critical theoretical perspectives, it examines how annual reports contribute to the gendering of organisations through an empirical study of representations of gender in their texts, statistics and images. The results suggest that stereotypical images are dominant and the representational practices reinforce the traditional gendered division of labour. We conclude that the masculine connotation of financial reports thwarts a more diverse representation of gender in organisations.     

How plain English use affects the length of annual reports: Evidence from the annual reports of foreign firms listed on the US stock exchange

This study examines the impacts of plain English on the length of annual reports for the sample of 20-F forms which are annually filed by foreign firms listed on NYSE and NASDAQ. We found out that foreign firms have better complied with plain English in their disclosures over time with shorter sentences, less jargon, and readable writing styles; however, there was a significant increase in the length of 20-F from 2004 to 2013. We also recognize the impacts of plain English on the length of annual reports are mixed. The issuers may completely improve the readability of annual reports without significantly increasing the length of annual reports if they sophisticatedly combine all four elements of plain English in their disclosures. Additionally, the usage of passive voice and jargon in firms’ disclosures negatively influences the liquidity of stocks. There are significant differences in behaviors of issuing annual reports among countries. After the financial crisis in 2009, annual reports become longer and less readable.     

Designing the annual reports of burton plc from 1930 to 1994

This paper undertakes a historical review of the use of design and designers in the annual reports of Burton PLC, against a backdrop of the firm's commercial history. It highlights a subordinate role for design from 1930 until the 1970s, when it was used increasingly to embellish the annual report. Design assumed a very significant role from 1984, when the firm's annual report was transformed into a corporate communications tool. The paper suggests that Burton was among the first British companies to reach this stage, and that it was some ten years behind the generality of U.S. corporations in this regard. Using Burton as an example, the study concludes by proposing that the turning of the annual report into a public relations document has latent disadvantages and by advocating that design briefs in this area should be differently focused.     

Analysing the determinants of narrative risk information in UK FTSE 100 annual reports

We investigate the relationship between the quantity of narrative risk information in corporate annual reports and ownership, governance, and US listing characteristics. We find that corporate risk reporting is negatively related to share ownership by long-term institutions, and thus the results of this study put forth that this important class of institutional investor has investment preferences for firms with a lower level of risk disclosure. Concerning governance, we find that different types of board director fulfil different functions, with both the number of executive and the number of independent directors positively related to the level of corporate risk reporting, but not the number of dependent non-executive directors. This supports a recent emphasis in the UK on the independent aspects of non-executive directors for good corporate governance. Separate investigation of business, financial, and internal control aspects of risk reporting that correspond to the three classes of risk-reporting guidance in the UK reveals that the pattern of risk information in the annual report may be dependent upon the form that reporting regulation takes.     

上市公司年报披露六个方面的新变化

中国证监会及沪深两个证券交易所最近发布的关于做好上市公司2000年年度报告工作的通知较往年有一些新变化,我认为需要会计工作人员和注册会计师予以关注,并严格遵守执行.新变化主要体现在以下六个方面: 一,强化了利润分配会计政策信息披露的充分性     

Environmental,social and governance reporting in annual reports: A textual analysis

Considering environmental, social, and governance (ESG) factors becomes increasingly important for companies and investors. However, “ESG” is not clearly defined so far and, therefore, it is difficult to measure the ESG activity of companies. We analyze the extent and changes in 10‐K reports and proxy statements on ESG, using a textual analysis and creating an ESG dictionary. The results show an average of 4.0 % ESG words on total words in the reports. The ESG word list with 482 items can be used to quantitatively examine the extent of ESG reporting, which will be helpful especially for SRI investors. Our classification of 40 subcategories allows a highly granular analysis of different ESG related aspects. Moreover, indications for a relation between changes in reporting and real events, especially negative media presence, are detected. Regulatory bodies have to be aware of the use of such words and how they are used.     

Signaling strategies in annual reports: Evidence from the disclosure of performance indicators

In voluntary annual report communication, empirical results of signaling theory are contrasting, mainly owing to problems in disclosure measurements. We focus on a specific piece of incremental information and study the signaling strategies in annual reports by analyzing the disclosure of performance indicators that provide incremental information. In this paper, we scrutinize the business review of a sample of 120 listed Italian companies for fiscal year 2010. After controlling for size, risk, and industry, our analysis confirms that the number of indicators published is positively related to firm profitability. Our results help clarify the signaling strategies in annual report communication. Operatively, our evidence can help regulators and standard setters to better discipline the communication of relevant and private information in annual reports, particularly performance indicators.     

Public accountability: a new paradigm for college and university annual reports

This paper argues that the decision usefulness paradigm, which currently dominates accounting theory, is not an adequate basis for considering external reporting. A theoretical foundation is developed that draws upon older ideas of stewardship, as well as more recent notions of public accountability and social responsibility. The specific case of college and university reporting is used to delineate the impact a public accountability conceptual framework could have. The new paradigm is needed to address changes in society and in the environment of higher education in the US and other Western-style countries during the last three decades of the twentieth century. Numerous scandals and other dubious affairs involving even the most senior public officials has brought about an erosion of public confidence, and led to widespread demands for improved accountability by public officials and institutions. Comprehensive disclosures on the condition and performance of institutions would move college and university external reporting beyond decision usefulness and towards true public accountability.     

中国上市公司年度报告披露及时性实证研究

年度报告作为投资者决策的重要信息源之一,其及时性受到了监管部门和市场研究者的关注。本文通过对中国上市公司1993～2003年间公布的8294份年度报告披露时间进行多元回归分析,发现除盈利公司比亏损公司更及时地公布其年度报告外,标准无保留审计意见公司也较非标准无保留意见的公司更及时地披露其年度报告,证实了中国股票市场存在“好消息早,坏消息晚”披露的基本规律。而且,随着时间推移,我国上市公司年报披露的及时性在逐步提高。