Importance of Annual Reports of Listed Company for Investors and Security Markets

ANNUAL REPORTS OF LISTED COMPANY 1
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ANNUAL REPORTS OF LISTED COMPANY 2
EXECUTIVE SUMMARY
The purpose of this report is to comment on the information contained in the annual report of
Australian bank limited, access the relationship between social accountability and general
purpose statements, provide the importance of full disclosure of information in the annual reports
to the company, evaluate the importance of Australian accounting standards boards (AASBs).To
examine how investors and security markets react to different disclosures in the annual reports
and to outline the importance of Australian accounting standards boards(AASBs) in Australian
business practices. This study involved examination of annual reports of the company to
establish this facts. Income statement, statement of financial position and cash flow statement
was analyzed.it was established that annual reports are important to different groups of
individual.

ANNUAL REPORTS OF LISTED COMPANY 3
Table of Contents
1.0 INTRODUCTION.................................................................................................................................4
2.0 SOCIAL ACCOUNTABILITY AND GENERAL PURPOSE STATEMENT.....................................4
3.0 IMPORTANCE OF AUSTRALIAN ACCOUNTING STANDARD BOARD IN BUSINESS
PRACTICES...............................................................................................................................................5
4.0 INFORMATION CONTAINED IN ANNUAL REPORTS OF LISTED COMPANYS ON
AUSTRALIAN STOCK EXCHANGE (ASX)............................................................................................5
4.1 Income statement.............................................................................................................................5
4.2 Statement of financial position.......................................................................................................6
4.3 Cash flow statement.........................................................................................................................6
4.4 Foot notes.........................................................................................................................................6
4.5 Directors’ declaration......................................................................................................................7
5.0 INCENTIVES FOR MANAGERS TO DISCLOSE CERTAIN INFORMATION IN THE ANNUAL
REPORTS...................................................................................................................................................7
6.0 HOW INVESTORS AND SECURITY MARKETS REACT TO DISCLOSURE................................8
7.0 CONCLUSION.....................................................................................................................................8
8.0 REFERENCES....................................................................................................................................10
9.0 APPENDICES.....................................................................................................................................11

ANNUAL REPORTS OF LISTED COMPANY 4
1.0 INTRODUCTION
This report involves examination of the annual reports prepared by the Australian bank limited.it
involves in-depth analysis of different reports such as income statements, statements of financial
position and the cash flow statement for the company. This is to show various elements
contained in them and how such elements are used by various groups in decision making.
2.0 SOCIAL ACCOUNTABILITY AND GENERAL PURPOSE
STATEMENT
“Yes, it is true that Social accountability is part of objectives of general purpose financial
reports’. “Social accountability refers to a state of being responsible to give accurate information
to third parties so that they can be able to make informed decision making with regard to the
information given. Example investment decision. General purpose financial reports on the other
hand refers to reports that aims at giving information to users who are basically not within the
entity and don’t have the technical expertise to understand such reports. Therefore the two are
seen as part of each other (Tilling &Tilt, 2010).
 General purpose reports assist management to be accountable to those who provide
resources to the entity on how those resources have been utilized and whether they are
utilized in the best interest of shareholders.
 Provide information to consumers of goods and services of the company. The consumers
want to know whether the goods and services offered to them are of the correct quality
 Assist those with indirect interest like the government and labor organizations. These
bodies assist those with direct interest on company’s affairs like protecting rights of
workers. Government would want to know if the laws that govern operation of entities
are followed to the later such as disclosure requirements with regards to profits made for
tax purposes.
 Creditors to the company can use information contained in this reports to forecast the
forthcoming performance of the firm. For example the liquidity of the company can show
that it is able to pay its obligation in future. This will ensure that the entity is socially
responsible and accountable to creditors by making such information available to them.