The Communication of Accounting Information in Summary Annual Reports
33 Pages Posted: 9 Mar 2018
Date Written: February 28, 2018
This paper examines summary annual reports (SAR) as an alternative channel for communicating financial information. We use a sample of New Zealand local government (councils) that are required to report audited SAR. Using various measures, we compare document length and readability of SAR and annual reports (AR). We find that that SAR are approximately 10 percent of the AR length, but have the same ‘difficult’ readability score as the annual report. We then examine the relation between SAR report length and the level of disclosures (using a disclosure index). After controlling for other factors that impact the level of disclosure, we conclude that larger councils have longer SAR but that the reduction in SAR is driven by lower levels of disclosure. We then discuss the policy implications of our findings.
Keywords: summary annual reports, concise reports, information load, readability, local government
JEL Classification: M41, M48
Suggested Citation: Suggested Citation