Disclosure in Published Annual Reports

Published annual reports are extremely important sources of corporate information. The focus of this research is on the annual report disclosure practices of large industrial companies. Specifically, this study seeks to accomplish three interrelated objectives. The first is to assess the annual report information needs of informed report users. The second is to evaluate the disclosure practices of large industrial firms in relation to user information needs. The final objective is to examine the influence of corporate size and industry variables in explaining annual report disclosure differences among large industrial firms. To accomplish the first objective, a disclosure model was developed using questionnaire responses from 275 Chartered Financial Analysts (CFAs). For the second objective, the disclosure model was applied using a sample of companies from the Fortune 1,000. The analysis of covariance was then used to test for the influence of size and industry variables on disclosure. Major conclusions drawn from the study are summarized in the final section.