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Never mind the colour; what does it mean?

Article Abstract:

Results of a recent study show that 79% of the largest listed companies in the UK use graphs to present quantitative financial information. The popularity of graphs may well be due to their ability to attract attention and their potential for enhancing communication. However, a study sponsored by the Chartered Association of Certified Accountants of the use of graphs in 240 large UK-based businesses found evidence that financial graphs in corporation reports are not faithful representations of underlying accounting data. The study found three types of graphical infidelity: bias in selectivity, measurement distortions and presentational infidelity. In view of these findings, specific guidelines in the use of graphs should be developed so that firms will meet the reliability requirement for financial statements set by the Accounting Standards Board and the International Accounting Standards Committee.

Author: Beattie, Vivien
Publisher: Institute of Chartered Accountants in England & Wales
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1992
Usage, Ethical aspects, Financial statements, Graphic methods

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Making corporate reports valuable: practical testing

Article Abstract:

The Institute of Chartered Accountants of Scotland's proposals for improving corporate reports are detailed in 'Making Corporate Reports Valuable' (MCRV) published in May 1988. The two most important proposals offerred by the ICAS concern the areas of disclosure and valuation. The Institute believes that numbers should be accompanied by informative disclosures and explanations in financial reports to make figures more meaningful. The ICAS also sees the need for a new set of basic financial statements whose underlying concept is the valuation of assets and liabilities based on net realizable value. To test the workability of these proposals, the Scotland-based firm Grampian Holdings PLC has agreed to implement them on a trial basis in one of the company's subsidiaries. The results of this experiment are discussed.

Author: Weetman, Pauline
Publisher: Accountants Publishing Co., Ltd.
Publication Name: The Accountant's Magazine
Subject: Business
ISSN: 0001-4761
Year: 1990
Professional organizations, Evaluation, Institute of Chartered Accountants of Scotland

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Subjects list: Research, Corporation reports, Company reports
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