Abstract
The purpose of this article is to examine Bangladeshi individual investors’ use of corporate annual reports and their perceptions of 18 annual report sections. The data reported in this study were collected through a questionnaire survey. The 316 responses received were analysed using descriptive statistics, the ANOVA test statistics, the χ2 statistics, and the Student–Newman–Keuls multiple range test. The study reveals that just over one-third of the respondents regularly read annual reports of the companies in which they have investment. Trading frequency is not significant in affecting the readership behaviour of individual investors. Among the 18 annual report sections, traditional financial statements, namely the income statement, the balance sheet and the cash flow statement were the most read and important sections using both the rating and ranking assessment methods. Corporate environmental report, essay and pictorial on operations are the least read and the least important sections. Lack of time, lack of usefulness and lack of interest were attributable to individual investors’ lack of readership of corporate annual report sections in Bangladesh.
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Notes
User groups considered in prior studies include general investors, institutional investors, academics, auditors, credit analysts, financial analysts, managers, bankers, regulators, stockbrokers and tax officials (Baker and Haslem, 1973; Anderson, 1981; Day, 1986; Vergoossen, 1993; Nicholls and Ahmed, 1995; Abu-Nassar and Rutherford, 1996; Karim et al, 1996; Naser et al, 2003; Al-Razeen and Karbhari, 2004; Mirshekary and Saudagaran, 2005; Alattar and Al-Khater, 2007; De Zoysa and Rudkin, 2010).
Before the amendment on 4 January 2000, the requirement was to submit the financial statements to the Exchanges and to the Government at least 14 days before the AGM date [Rule 12(4)].
The Student–Newman–Keuls multiple range test requires the use of k−1 ranges for the comparison of k group means. First, the means are ranked in an ascending order. Thereafter, comparisons are done in a sequential manner – first, the largest mean in the first row is compared with the smallest mean in that row. If the difference is significant, the largest mean is then compared with the second smallest mean. This process continues until an insignificant difference is found. The same procedure is then carried out for the other rows. The range used to test for a significant difference between means depends on the number of means that separate the two means being compared. It is to be noted that the probability of obtaining one or more spuriously significant results (Type I errors) does not exceed α (Chang et al, 1983; Vergoossen, 1993; Cramer and Howitt, 2004).
We would like to thank an anonymous reviewer for pointing out this.
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Biswas, P., Bala, S. Usefulness of corporate annual reports to individual investors in Bangladesh. Int J Discl Gov 13, 97–116 (2016). https://doi.org/10.1057/jdg.2015.11
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DOI: https://doi.org/10.1057/jdg.2015.11