The Impact of Graph Slope on Rate of Change Judgments in Corporate Reports

23 Pages Posted: 18 Nov 2002

See all articles by Vivien A. Beattie

Vivien A. Beattie

Lancaster University - Management School

Michael J. Jones

Thompson Jones L.L.P.


The use of graphs to disclose financial information in annual reports represents a significant dimension of financial disclosure management. Statistical graphics studies demonstrate that the accurate visual decoding of a graph is contingent upon the graph's. This article reports two related studies into the slope parameter in a financial reporting context. A laboratory experiment indicates that sub-optimal slope parameters produce distorted judgments of corporate performance and an examination of the graphical formatting choices of 240 large U.K. companies indicates material departures from the optimal slope parameter. Policy implications are discussed.

Keywords: corporate annual reports, graphical perception, slope parameter

JEL Classification: M41

Suggested Citation

Beattie, Vivien and Jones, Michael J., The Impact of Graph Slope on Rate of Change Judgments in Corporate Reports. Available at SSRN:

Vivien Beattie (Contact Author)

Lancaster University - Management School ( email )

Lancaster, LA1 4YX
United Kingdom

Michael J. Jones

Thompson Jones L.L.P. ( email )

2801 Monterey Salinas Hwy #G
Monterey, CA 93940-6401
United States
831-373-1800 (Phone)
831-372-0899 (Fax)

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