Lancaster EPrints

The use and abuse of graphs in annual reports:a theoretical framework and an empirical study

Beattie, Vivien and Jones, Mike (1992) The use and abuse of graphs in annual reports:a theoretical framework and an empirical study. Accounting and Business Research, 22 (88). pp. 291-303. ISSN 0001-4788

Full text not available from this repository.

Abstract

This study investigates the use and abuse of graphs in external financial reporting. From an analysis of the annual reports of 240 large UK companies for the year ended 1989 we document the nature and extent of graph usage. The average number of graphs per annual report is 5.9, with 65% of companies graphing at least one key financial variable. Drawing on modern theories of graphical perception we identify selectivity in the use of graphs, and non-compliance with the principles of graph construction, as potential distortions in the communication process. We find that companies with ‘good’ performance are significantly more likely to use financial graphs. Material measurement distortions occur in 30% of these graphs, with the underlying numerical data being exaggerated by an average of 10.7%. We conclude that auditors' and directors' responsibilities in this area should be made more explicit.

Item Type: Article
Journal or Publication Title: Accounting and Business Research
Subjects:
Departments: Lancaster University Management School > Accounting & Finance
ID Code: 66474
Deposited By: ep_importer_pure
Deposited On: 17 Sep 2013 09:12
Refereed?: Yes
Published?: Published
Last Modified: 16 Oct 2017 06:13
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/66474

Actions (login required)

View Item