A Case of Lengthier Annual Reports Essay Example | Topics and Well Written Essays - 1000 words

A Case of Lengthier Annual Reports - Essay faceIt also includes the high societys mission statement and pertinent financial statements (Holmes, Sugden, & Gee, 2008). While one-year breeds utilise to fall considerably below the 100-page mark during the last decade, a survey by business consultatory firm Deloitte shows that in 2010, the average duration of yearly reports has reached an all-time high of 101 pages (Deloitte, 2010). Interestingly enough, the lengthiest reports be littered with more than advertisement-like photographs and captions than relevant narratives and figures. These are the supposed culprits of reports being lengthier than they used to be. Such a phenomenon is of primordial interest because of the impact that this has on the ability of such reports to serve their true purpose. Questions arise as to whether lengthier reports genuinely provide readers with more asseverateation or additional confusion? Do the long reports indicate that companies are reveali ng more of their respective businesses actual performance or are they merely an effort to colour in over weaknesses that new regulatory rules aim to draw out? Do lengthier reports mean more nerve centre or just more clutter? This paper attempts to provide answers to these questions and adequately support the claims made herein by extracts from actual company one-year reports. Company reports included are those of Ericssion, Carlsberg, and Walmart. Reasons for the increasing length of annual reports According to Isobel Sharp, an audit partner at Deloitte, annual reports are significantly increasing in length because companies are now revealing their companys business risks and even having important performance indicators discover in their reports. Moreover, corporates now provide a directors responsibility statement, a requirement introduced close to four years ago as a consequence of EUs Transparency Obligations directing (Deloitte, 2010). Essentially, the many rules that are brought up in recent years are also being fiendish for the consistently rising trend in annual report length. However, the Financial Reporting Council (FRC) of UK points out that company reports in general are trying to please too many users at the same time, thus the almost unstoppable increasing trend in the length of annual reports (UK FRC, 2010). Preparers try to put in as much additional information as they can in an attempt to make the reports as appealing to current and prospective investors as possible (Campbell & Slack, 2008). One company that illustrates this is the 163-page Annual Report by the Carlsberg Group of companies which feels so much more like a 163-page advertisement, with pages that are more fitting in a magazine than in a business report. On the other hand, Boeings annual report can non be more straightforward in its layout and content. Yet, the company infallible 156 pages to provide all the data needed and required by regulatory institutions. These two ex amples illustrate that the burgeoning lengths of annual reports are both a sequel of additional requirements from regulatory institutions, and the trying-to-please-everybody approach of report preparers. If these requirements are further increased in the future, then lengthier annual reports may definitely be expected. Experts are even hinting that 200 page mark may not be far from being surpassed considering the current trend of adding more and more arguably irrelevant pages to annual reports. More words For better or for worse? Preparers of annual reports reveal that because of the need to effectively inform shareholders of what is happening in the business, and the need to be able to satisfy the disclosure rules set by regulators, more words are apparently needed (The FRC, 2011). However,