Effect of graphical presentations on insights into a company's financial position: an innovative educational approach to communicating financial information in financial reporting

This article focuses on the graphical presentation of the financial ratios of the firm. Following an earlier plea for visualizing the financial report based on pacioli's treatise Divina Proportione, this study investigates the benefits of visualizing and reports on an experiment into the significance of visual information, designed to compare visual and numerical financial information. The experiment was conducted with the help of third-year accounting students. The study demonstrates an alternative teaching method and indicates that this can be a very effective and stimulating process of accounting education and training. Further the co-operation between teacher and students makes an intersting contribution to the development of better accounting education and training. The exploratory research indicates that presentation of graphical information produces time-gains in comparison with numerical information alone. Memory plays a very important role here. The conclusion are: first, that visual information can be considered as very important in providing a clear insight into the financial position of the firm, thus improving communication; and second, that the integration of accounting research and teaching is a very promising way of preparing academically and professionally future accounting practitioners.