Graphical Representation of Annual Reports - Essay Example

Annual reports are the basis for how stockholders and others view the performance of an organization, influencing their decision to retain the stocks or not. The annual report consists of a financial section and a possible narrative section. The financial section remains accurate, because of the attention paid to it by the auditors. The decision to have a narrative section and what it contains is decided by the organization, which is influenced by its financial position.

Graphs in the narrative section play an important part in the comprehension of the narrative section. Yet, the graphic designer through a selection of graph type, colour, scale, emphasis, and the like, can manipulate the perception of the reader of the narrative section.

The distortion of graphs in the narrative section is established through several studies. For example, the Canadian Institute of Chartered Accountants in 1993 reported fifteen different ways in which distortion in graphs can occur. Evaluation of financial graphics and the actual financial data in annual reports confirm the use of such graphic distortion.

Results of the literature review demonstrate that there is manipulation in the selection and preparation of graphic representation that have implications for accountancy-related issues, international opinions, and the communications intended through the annual reports. However, a key question that remains unanswered is whether company size has any role to play in the manipulation of graphical representation in annual reports (Penrose, 2008).

This article presents the problem of the requirement for writing skills in accounting firms. Many bright university students choose to work in accounting firms. In this era of globalization, writing skills in accounting firms have gained in importance, raising questions as to the specific requirements of writing skills in accounting firms, whether these needs are satisfied; and whether policies and practices in accounting firms support the development of writing skills.

To find answers to these questions, this article has studied 900 chartered accountants in five large accounting firms, in Canada, after stratifying them into three levels, based on their managerial levels, employing a questionnaire. Analysis of the data from the questionnaire provided the findings of the study.

Though 64% of all the writing in accounting firms pertains to servicing clients, it is seldom used as a means for promoting ideas and services. There is a significant reduction in writing competencies going from the top of the management ladder to the lower rungs of the management ladder. Most of the writing is writer oriented rather than client-oriented. Universities are producing good graduates in professional skills, but they do instil writing skills in these bright products of the universities. Accounting firms while inducting personnel are more interested in their work experience than in their writing competencies.

This deficiency in writing competencies is not removed in accounting companies, as there is no effective training provided for the development of writing competencies. Accounting firms do not perceive writing skills as a high priority, which is reflected in their willingness to use financial resources to provide training for developing professional competencies, but not on training for developing writing skills.

In conclusion, the article calls for a change in the perception of writing skills by accounting firms, to enhance relationships with their clients given the importance of this relationship for accounting firms. Only then will writing be encouraged in accounting firms, which will enhance the comfort levels between accounting firm personnel and their clients (Northey, 1990).