The annual report is considered by some to be the single most important printed document that companies produce. In recent years, annual reports have become large documents. They now include such sections as letters to the stockholders, descriptions of the business, operating highlights, financial review, management discussion and analysis, a discussion of company internal controls, segment reporting, inflation data, and the basic financial statements. The expansion has been due in part to a general increase in the degree of sophistication and complexity in accounting standards and disclosure requirements for financial reporting. The expansion also is reflective of the change in the composition and level of sophistication of users. Current users include not only stockholders but also financial and securities analysts, potential investors, lending institutions, stockbrokers, customers, employees, and whether the reporting company likes it or not--competitors. Thus, a report that was originally designed as a device for communicating basic financial information now attempts to meet the diverse needs of an ever- expanding audience. Users hold conflicting views on the value of annual reports. Some argue that they fail to provide enough information, whereas others believe that disclosures in annual reports have expanded to the point where they create information overload. Others argue that the future of most companies depends on acceptance by the investing public and by its customers; therefore, companies should take this opportunity to communicate well-defined corporate strategies.
The annual report is considered by some to be the single most important printed document that companies produce. In recent years, annual reports have become large documents. They now include such sections as letters to the stockholders, descriptions of the business, operating highlights,
The expansion also is reflective of the change in the composition and level of sophistication of users. Current users include not only stockholders but also financial and securities analysts, potential investors, lending institutions, stockbrokers, customers, employees, and whether the reporting company likes it or not--competitors. Thus, a report that was originally designed as a device for communicating basic financial information now attempts to meet the diverse needs of an ever- expanding audience.
Users hold conflicting views on the value of annual reports. Some argue that they fail to provide enough information, whereas others believe that disclosures in annual reports have expanded to the point where they create information overload. Others argue that the future of most companies depends on acceptance by the investing public and by its customers; therefore, companies should take this opportunity to communicate well-defined corporate strategies.
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