communication accounting

Identify a company that prepares a Chairman’s Statement (or local equivalent) and presents its financial results in graphical form: Obtain the company’s most recent annual reporting documents. In the light of relevant research and regulation, critically examine the presentation of its results in (a) the Chairman’s Statement (or local equivalent) and (b) the financial graphs*. Compare your findings to the numerical results reported in the financial statements and consider whether there is evidence of impression management. Compare your results to those of relevant research.

[You should not use examples discussed in class]

2000-2500 words. The submission must be word-processed.

*Concentrate on financial highlights.

JD October 2013
MN5904 Coursework Guidance Notes 2014

This is application of theory discussed in classes to practice.

Example – you do not need to check with me that your example is OK. Use the latest reports/reviews – 2012-13.

Regulation and background (not too long)

Mandatory – regulated by company law, accounting standards, corporate governance codes.
Voluntary – less regulated, less reliable, therefore more susceptible to impression management. Includes graphs.
Only regulations are UK auditing standard SAS 160 – ‘consistency’ between the rest of the material and the financial statements, and recent company law that refers to ‘care with objectivity’ of graphs as they communicate powerfully. Mention ‘Cutting Clutter’ panel in UK.

Lee (1994), Davison & Skerratt (2007), Beattie, Dhanani and Jones (2008) – evolution of annual report into an impression management tool.


Focus on the company’s Chairman’s Statement, and analyse it using tools we have discussed in classes (readability, variability, textual characteristics).

Make sure the sections for graphs/narratives are of reasonably similar length.


Focus on the company’s materials, particularly the financial highlights, and analyse it using tools we have considered during classes (Selection, Manipulation etc).
Consider both the advantages and any evidence of manipulation
Present your findings in tables.
Include examples of the graphs in your work.

For both narratives and graphs
Compare your findings to the story told by the financial statements.
Is there any impression management?
Compare your findings to those of key research.

Good marks will be awarded for the following work:

Well structured
Well focused on the case material
Good analysis and comparisons
Well informed by research, with clear referencing

MN5904 Reading

The Routledge Companion to Accounting Communication (Editors Jack, L., Davison, J., Craig, R.), Oxford: Routledge. Forthcoming April 2013.

Note: New Centre for Impression Management in Accounting Communication,
Bangor University, UK website

Week 1 International financial reporting environment
Arquero, J. L., Hassal, T., Joyce, J. and Donoso, J. A., ‘Accounting Students and …..Communication Apprehension: A Study of Spanish and UK Students’, European ….Accounting Review, Vol. 16, No. 2, 2007.
ASB (2000) Discussion Paper – Year End Financial Reports: Improving
FRC (2011) Discussion Paper. Cutting clutter in annual reports. Available on the …..internet.
Lee T. (1994) ‘The Changing Form of the Corporate Annual Report’, The Accounting
Historians Journal 21:1. [Provided as a PDF]
Courtis J. (2002) ‘Emerging sensitivity of accountants to the role of communication
and perception engineering’, preface to Accounting, Auditing and Accountability
Journal Special Issue Communication, corporate annual reports and perception
engineering. [Provided as a PDF]

Week 2 Reading contracts and content in financial reporting; intangibles.
Davison, J. and Skerratt, L. (2007), Words, pictures and intangibles in the corporate
report, Institute of Chartered Accountants of Scotland.
Lev, B. (2001). Intangibles: Management, Measurement, and Reporting. Brookings
Institution Press. Washington DC.
Mouritsen, J, H T Larsen and P N D Bukh (2001a), ‘Intellectual Capital and the
‘Capable Firm’: Narrating, Visualising and Numbering for Managing
Knowledge’, Accounting, Organizations and Society, Vol. 26: 7/8, 735-762.
ICAEW (2003), New reporting models for business, ICAEW, London.

Week 3 Lay and expert readers; web reporting
Bartlett, S. A. and Chandler, R. A. (1997) ‘The corporate report and the private
shareholder: Lee and Tweedie twenty years on.’, British Accounting Review 29: 245-
Barker, R. (2000) ‘FRS3 and analysts’ use of earnings’, Accounting and Business
Research 30:2 95-109.
Breton, G., and Taffler, R. J. (2001) ‘Accounting information and analyst stock
recommendation decisions: a content analysis approach’, Accounting and
Business Research 31:2 91-101.
Beattie, V. and Pratt, K.(2003)Issues concerning web-based business reporting: an
analysis of the views of interested parties. 0890-8389 British Accounting Review
35 (2) pp 155-187
Jones, M. J. and Xiao, J. Z. (2003) Internet reporting: Current trends and trends by
2010, Accounting Forum 27:2
Xiao, Z., Yang, H. and Chow, C. (2004). Patterns and Determinants of Internet-
Based Corporate Disclosure in China. Journal of Accounting and Public
Policy, Vol. 23, No. 3, pp. 191-225.

Week 4 Accounting narratives: readability, obfuscation, attribution
Courtis, J. K. (1995) ‘Readability of annual reports: Western versus Asian evidence’,
Accounting, Auditing & Accountability Journal 8 :2 4-17
Courtis, J. K. (1998) ‘Annual report readability variability: tests of the obfuscation
hypothesis’, Accounting, Auditing & Accountability Journal 11:4 459-471
Clatworthy, M., and Jones, M. (2003), ‘Financial reporting of good and bad news:
evidence from accounting narratives’, Accounting and Business Research 3
Clatworthy, M.A., and Jones, M. J. (2006) ‘Differential Patterns of Textual
Characteristics and Company Performance in the Chairman’s Statement’
Accounting, Auditing and Accountability Journal Vol. 19, No. 4, pp. 493-511.
Craig, R.J. and Brennan, Niamh M. (2012), An Exploration of Language Choice in CEO
Letters to Shareholders and Corporate Reputation’, Accounting Forum, Vol. 36 No. 3,
pp. 166-177.
Jones, M. (1997) ‘Critical appraisal of the cloze procedure’s use in the accounting
…..domain’, Accounting, Auditing & Accountability Journal, 10:1 105-128
Merkl-Davies, D. M. and Brennan, N. M. (2007), “Discretionary Disclosure Strategies in
Corporate Narratives: Incremental Information or Impression Management?”, Journal
of Accounting Literature, Vol. 26, pp. 116-196.
Merkl-Davies, D. M. and Brennan, N. M. (2011), “A Conceptual Framework of
Impression Management: New insights from psychology, sociology, and critical
perspectives”, Accounting and Business Research, in press.
Merkl-Davies, D. M., Brennan, N. M., and McLeay, S. J. (2011), “Impression
management and retrospective sense-making in corporate narratives: A social
psychology perspective”, Accounting, Auditing and Accountability Journal,
Vol. 24 No. 3, pp. 315-344.
Smith, M. & Taffler, R. (1992) ‘Readability and Understandability: Different Measures
…..of the Textual Complexity of Accounting Narrative’, Accounting, Auditing &
…..Accountability Journal, 5:4 84-98

Week 5 Graphs: uses and abuses; communication or manipulation?
Beattie, V. A. and Jones M. J. (1992) ‘The Use and Abuse of Graphs in Annual
Reports: Theoretical Framework and Empirical Study’, Accounting and Business
Research 22:88: 291-303.
Beattie, V. A. and Jones, M. J. (1997), ‘A Comparitive Study of the Use of Financial
Graphs in the Corporate Annual Reports of Major U.S. and U.K. Companies’,
Journal of International Financial Management and Accounting, Vol 8 No 1,
pp. 33-68.
Beattie, V. A. and Jones, M. J. (2001), ‘A six-country comparison of the use of graphs
in annual reports’, The International Journal of Accounting, 36, pp. 195-222.
Beattie, V. A. and Jones M. J. (2008), Corporate Reporting using Graphs: a Review and
synthesis, Journal of Accounting Literature 27, pp. 71-110.

Week 6 Accounting and rhetoric in words and pictures
Davison, J. (2002) ‘Communication and antithesis in corporate annual reports: a
research note’, Accounting, Auditing and Accountability Journal, Vol. 15:4 594-
Davison, J. (2008) ‘Rhetoric, repetition, reporting and the “” era: words, pictures,
intangibles’, Accounting, Auditing and Accountability Journal, Vol. 21 No. 6,
pp. 791-826.
McCloskey D. (1986) The Rhetoric of Economics
McGoun, E. G., Bettner, M. S., Coyne, M. P. (2007), Pedagogic metaphors and the
nature of accounting signification, Critical Perspectives on Accounting, Vol. 18,
pp. 213-230.

Week 7 Visual images, photographs, accounting & accountability


Special issues on the visual:
Accounting, Auditing and Accountability Journal 2009 (22,6) (Editors, Davison & Warren)
Accounting, Organizations and Society 1996 (Editor, Hopwood)

Puyou et al (2012) Imagining Organizations. Performative Imagery in Business and Beyond. Routledge Studies in Management, Organizations and Society.

Journal articles:

Davison, J. (2007) ‘Photographs and accountability: cracking the codes of an
NGO’, Accounting, Auditing and Accountability Journal
Davison, J. & Warren, S. (2009) ‘’Imag[in]ing accounting and accountability’ 22:6 845-….857
‘Icon, Iconography, Iconology: Visual Branding, Banking and the Case of the Bowler Hat’
[re the collapsed Bradford and Bingley Bank]. Accounting, Auditing and Accountability
Journal, 2009 (22,6), 883-906.
Davison, J. (2010) ‘[In]visible [in]tangibles: visual portraits of the business élite.’ …Accounting, Organizations and Society,35: 2, 165-183.
Preston, A. M., & Young, J. J. (2000). Constructing the global corporation and corporate
constructions of the global: a picture essay. Accounting, Organizations and Society
25(4-5), 427-449.
Graves, O, Flesher, D., and Jordan R. (1996) ‘Pictures and the Bottom Line:
Television and the Epistemology of US Annual Reports’, Accounting,
Organizations and Society 21:1 57-88.
McKinstry, S. (1996) ‘Designing the annual reports of Burton plc from 1930 to 1994’
Accounting, organizations and Society 21:1 89-111.
Preston, A., Wright, C. and Young, J. (1996). ‘Imag[in]ing Annual Reports’,
Accounting, Organizations and Society 21:1 113-137.

Week 8 Experimental research: readership and impression management
Beattie, V. A. and Jones, M. J. (2002) ‘Measurement distortion of graphs in corporate
reports: an experimental study’, Accounting, Auditing & Accountability Journal
15:4 546-564
Cho, C. H. Phillips, J. R. Hageman, A. M. and Patten, D. M. (2009) ‘Media richness, user … and perceptions of corporate social responsibility’, Accounting, Auditing & ….Accountability Journal 22: 933-952.
Libby, R., Bloomfield, R. and Nelson, M. W. (2002) ‘Experimental research in
financial accounting’, Accounting, Organizations and Society 27:8
Maines, L. D. and L. McDaniel L. (2000) Effects of comprehensive income
characteristics on nonprofessional investors’ judgments: the role of financial-
statement presentation format, Accounting Review, Vol. 75 No. 2, 2000.
Stanton, P. Stanton, J. and Pires G. (2004) ‘Impressions of an annual report: an
experimental study’, Corporate Communications: An International Journal 9:1
Townsend, C. and Shu, S. B. (2010) ‘When and how aesthetics influences financial …..decisions’, Journal of Consumer Psychology, 20: 452-458.

Week 9 Accounting Scandals

Creative Accounting, Fraud and International Accounting Scandals, Jones, M.
(Editor), Wiley, 2011.

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