Narrative reporting: analysts' perceptions of its value and relevance

Campbell, David J. and Slack, Richard (2008) Narrative reporting: analysts' perceptions of its value and relevance. Project Report. Association of Chartered Certified Accountants.

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Abstract

This research report is about the voluntary narrative sections of company annual reports, with particular reference to the annual reports of UK banks. Voluntary narratives are defined as those parts of the annual report not mandated by Companies Act requirements and not reported on as part of the audit report. Such disclosure narratives include, among other things, the chairman’s statement, chief executive’s review, social and environmental reports, and risk disclosures. There is an academic literature that has examined the patterns of voluntary disclosure and these contributions have fallen roughly into three general categories: empirical studies examining trends and changes in reporting; theory building and testing contributions; and user-needs analyses. It is to this latter strand of literature that this study aims to make a contribution. There has been a marked growth in many types of voluntary and narrative reporting in recent years, with media other than the hard copy annual reports in the ascendant as carriers of reporting messages. Despite this growth, large companies continue to produce elaborate, lengthy and detailed annual reports with narrative sections extending to, in some cases, hundreds of pages. The annual reports for 2006 of HSBC Holdings plc and Barclays plc were 458 pages and 310 pages respectively. One of the questions frequently raised, but not well answered, in considering this growth is the actual usefulness of this surfeit of narrative in annual reports. Who reads it, is the information useful and is it material to fund allocation decisions made by investors? And if not, what are the implications for preparers of annual reports?

Item Type: Report (Project Report)
Subjects: N400 Accounting
Department: Faculties > Business and Law > Newcastle Business School > Accounting and Finance
Depositing User: EPrints Services
Date Deposited: 02 Aug 2010 13:31
Last Modified: 23 Feb 2016 11:46
URI: http://nrl.northumbria.ac.uk/id/eprint/2583

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