Chapter 12

The annual report

‘It is a yearly struggle: the conflict between public relations experts determined to put a sunny face on somewhat drearier figures, and those determined to tell it like it is, no matter how many “warts” there are on the year's story. The annual report is a vital instrument designed – ideally – to tell the story of a company, its objectives, where the company succeeded or failed, and what the company intends to do next year.’

Kirsty Simpson, ‘Glossy, expensive and useless’, Australian Accountant, September 1997, pp. 16–18.

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Learning Outcomes

After completing this chapter you should be able to:

  • Explain the nature of the annual report.
  • Outline the multiple, conflicting objectives of the annual report.
  • Discuss the main contents of the annual report.
  • Evaluate how the annual report is used for impression management.

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Chapter Summary

  • The annual report is a key corporate financial communication document.
  • It is an essential part of corporate governance.
  • It serves multiple, and sometimes conflicting, roles of stewardship/accountability, decision making and public relations.
  • It comprises key audited financial statements: income statement (i.e., profit and loss account), ...

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