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Vivien Beattie

University of Glasgow

Alpa Dhanani

Michael John Jones

Cardiff University

NOTES

(1.) This represents a random sample drawn from The T/rues 1000, a listing of the top U.K. companies.

(2.) Unfortunately, there is some ambiguity in that it is not clear from Lee's (1994) article exactly which material was classified as voluntary and which was regulatory.

(3.) Davison and Skerratt (2007: D&S) report separate annual report document data for the 35 companies that produce one annual report document and the 65 companies that produce two documents (typically an annual report and an annual review). We report here the figures for the pooled samples of 100 companies; these have been derived from the two sets of results reported in D&S. Thus, for example, 35 "annual report only" companies have a mean total page count of 90, whereas the 65 "two document" companies have a mean of 103. This gives a mean for the pooled sample of 98.3.

(4.) D&S classify regulatory materials as the following: financial statements and notes, operating and financial reviews, corporate governance disclosures, and corporate social responsibility statements. However, it is not clear why the operating and financial reviews and corporate social responsibility statements are classified as regulatory because there were no mandatory requirements in relation to these areas. The operating and financial review was, for companies reporting in 2002, the subject of best practice guidance (Accounting Standards Board, 1993).

(5.) A chairman's statement provides a personalized overview of the company's performance during the past year. It covers strategy, financial performance, and future prospects. The chief executive's review is a natural complement to the chairman's statement. The chief executive discusses (normally in some detail) business or geographic segments. The operating and financial review normally has two parts--sometimes consolidated, sometimes separate. The operating review discusses a company's results, income, and dividends, whereas the financial review covers capital structure and treasury policy. The voluntary operating and financial review has recently been supplanted by a mandatory business review, which is similar but less detailed (for more details, see Jones, 2006).

(6.) The directors' report presents supportive material not covered elsewhere in the report, such as changes in a company's activities, proposed dividends, or charitable and/or political gifts. The statement of directors' responsibilities spells out what the directors must do to keep proper accounting records and comply with the U.K. Companies Act. The remuneration report sets out details of the directors' pay and compensation packages. Finally, the corporate governance report covers items such as risk management, treasury management, internal control, going concerns, and auditors (for more detail, see Jones, 2(X)6).

(7.) In certain special circumstances, as identified by D. Mather, Mather, and Ramsay (2005), the researchers used discretion. Examples include where the values of a or h were close to zero, actual data were undisclosed, or the columns were very small.

(8.) See Note 4.

(9.) In actual fact, this legislation failed to arrive.

(10.) Except for the auditors" report in 1989.

(11.) The key financial variable graphs were treated as four separate topics.

(12.) Graphs with data for more than 5 years were omitted from the analysis because they represented a small proportion of the total graphs and thus resulted in void [chi square] tests.

(13.) We currently have no explanation for this surprising result. Table 1. A Summary of the Sample Characteristics and Data Collected Time period examined Current Study Sample characteristics 2004 1989

Sample population FTSE 500 FTSE 500

Number of companies 94 240 Data collected

Change in the structure and

form of annual reports

Page count * *

Change in general report * *

structure and form

Design features * *

Further analysis of nonlinancial * *

accounting information

Changes in the usage of

graphs in annual reports

Graph usage *

Analysis of graphs by topic *

Type of graphs for key *

financial variables

Relationship between graph *

usage and corporate performance

Length of time series graphed: *

Key financial variables

Relationship between length *

of time series graphs and

corporate performance

Incidence of materially *

discrepant graphs

Frequency of distribution of *

graph discrepancy index scores

Cause of materially discrepant *

key financial variable graphs

Beattie and

Jones Time period examined (1992a, 1992b) Sample characteristics 1989

Sample population FTSE 500

Number of companies 240 Data collected

Change in the structure and

form of annual reports

Page count

Change in general report

structure and form

Design features

Further analysis of nonlinancial

accounting information

Changes in the usage of

graphs in annual reports

Graph usage *

Analysis of graphs by topic *

Type of graphs for key *

financial variables

Relationship between graph *

usage and corporate performance

Length of time series graphed: *

Key financial variables

Relationship between length

of time series graphs and

corporate performance

Incidence of materially *

discrepant graphs

Frequency of distribution of *

graph discrepancy index scores

Cause of materially discrepant *

key financial variable graphs Time period examined Lee (1994) Sample characteristics 1965, 1978, 1988

Sample population Top U.K. firms

Number of companies 25 Data collected

Change in the structure and

form of annual reports

Page count *

Change in general report *

structure and form

Design features *

Further analysis of nonlinancial

accounting information

Changes in the usage of

graphs in annual reports

Graph usage

Analysis of graphs by topic

Type of graphs for key

financial variables

Relationship between graph

usage and corporate performance

Length of time series graphed:

Key financial variables

Relationship between length

of time series graphs and

corporate performance

Incidence of materially

discrepant graphs

Frequency of distribution of

graph discrepancy index scores

Cause of materially discrepant

key financial variable graphs Note: FTSE = Financial Times and London Stock Exchange. The table details the data collected in the present study for the two sample periods and compares the data to that in Lee (1994) and Beattie and Jones (1992a, 1992b). Table 2. Changes in the Structure and Form of Annual Reports: 1965 to 2004

Present Study

Full Sample

Panel A

2004 1989

M SD M SD N 94 240 Section I: Change in annual

report page count--

Main elements