The Communication of Accounting Information in Summary Annual Reports

33 Pages Posted: 9 Mar 2018

See all articles by Michael E. Bradbury

Michael E. Bradbury

Massey University

Pei‐Chi Kelly Hsiao

University of Auckland

Tom Scott

Auckland University of Technology

Date Written: February 28, 2018

Abstract

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

Bradbury, Michael E. and Hsiao, Pei‐Chi Kelly and Scott, Tom, The Communication of Accounting Information in Summary Annual Reports (February 28, 2018). Available at SSRN: https://ssrn.com/abstract=3134147 or http://dx.doi.org/10.2139/ssrn.3134147

Michael E. Bradbury (Contact Author)

Massey University ( email )

School of Accountancy
Private Bag 102 904
Auckland
New Zealand
64 9 414 0800 (Phone)
64 9 441 8133 (Fax)

Pei‐Chi Kelly Hsiao

University of Auckland

Private Bag 92019
Auckland Mail Centre
Auckland, 1142
New Zealand

Tom Scott

Auckland University of Technology ( email )

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand

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