Annual Report Graphics Use Article Review Samples

Corporations prepare annual reports because they are required by law to do so. They should report to their shareholders how the company has performed in the past year. At the same time, corporations use the opportunity to leave a good impression on the target readers—regardless of how the companies actually performed. They do this either through the narrative or the graphics.
There isn’t much the corporations can do about the financial statements. Laws, private auditors, and government auditors are strict regarding compliance. In the narrative section, graphic designers are free to do almost whatever they want to gain a favorable impression. “The graphic designer of the annual report can manipulate the perception of the data in a graph through selection of graph type, color, scale, emphasis, size, and other treatments.”
Readers can spend only a short time reading an annual report. After a a quick look at the financial statements for key information, graphics are looked at for a quick summary of the whole picture. Whether deliberately or unintentionally created, many graphs contain as much as 35% errors in annual reports from six countries reviewed in the past 30 years. Aside from erroneous data, graphic errors also contain aesthetic distortions like inaccurate scales or angles. All the errors leave a positive interpretation of the data. There are also variations in how the distortions are done in different countries, but suffice to say that such manipulations occur everywhere.
The study is not conclusive however on the overall effect of distorted graphics on the reader, as to whether it leads to more positive action as increasing investment or avoiding divestment. Distorted graphics in annual reports also happen because there are no regulations about their use.

Works Cited

Penrose, John M. "Annual Report Graphic Use: A Review of Literature." Journal of Business Communication 45.2 (2008): 159-180. PDF. 9 Mar 2015. <http://embanet.vo.llnwd.net/o18/USC/CMGT502/Week07/docs/CMGT502_w07_AnnualReportGraphicUse.pdf>.