Coursework Practical Guidelines
Identify two listed companies that present their financial results in graphical form: a UK company and a non-UK company. Obtain their annual reports. In the light of Beattie & Jones’ research and relevant regulation, critically compare and contrast the two companies’ graphical presentation of their results. Is there evidence of impression management?
Application of theory to practice. Example – you do not need to check with me that your example is OK. Use the latest reports/reviews – 2017 or 2018. Regulation and background (not too long) – 15% of marks Discussion of implications of voluntary disclosures and graphs for impression management, including consideration of research and relevant audit regulation. Comprehensive understanding of the regulatory and formal differences in disclosures and their relative importance for impression management. Well related to findings and to research Mandatory – regulated by company law, accounting standards, corporate governance codes. Voluntary – less regulated, less reliable, therefore more susceptible to impression management.
Includes graphs. Only regulations are UK auditing standard SAS 160 – ‘consistency’ between the rest of the material and the financial statements, and recent company law that refers to ‘care with objectivity’ of graphs as they communicate powerfully. Mention ‘Cutting Clutter’ panel in UK. Papers: Lee (1994), Davison & Skerratt (2007), Beattie, Dhanani and Jones (2008) – evolution of annual report into an impression management tool. Graphs – 85% of marks Focus on each company’s materials, particularly the financial highlights, and analyse it using tools we have considered during classes. Consider firstly the advantages. Consider secondly any evidence of manipulation through: (1) Selectivity of key Pfis (2) Measurement distortion Exaggeration Non-zero axes Broken axes Combined graphs etc. Present your findings in tables. Include examples of the graphs in your work.