Russell Library

Investors believe that corporate annual reports are generally correct and complete but criticize them as being too promotional and biased to be completely obejective. In addition, despite the fact the almost half of American investors hold the bachelor's degree or higher, annual reports are considered by many users to be difficult to understand. As a result, serious investors often seek out and utilize other sources for information. Sources cited as most often utilized are newspapers, trade journals, other financial repots, advisory services and direct contact with cmpant officials. The authors contend that one of the reasons that annual reports are not as informative as investors would like is that the accountants compiling them do not fully understand financial statement analysis. They urge that greater emphasis be placed on this topic in undergraduate programs in American business schools.