Corporate Annual Reports Essay Example | Topics and Well Written Essays - 1500 words

Corporate Annual Reports - Essay Example Some landmark events such as acquisitions or additional issue of stocks also find a place in these reports. The stock market crash of 1929 resulted in stringent standards applied to the preparation of Annual Reports. Hence the report has to be audited by a qualified accounting professional. The auditors role is to check for any intentional or accidental errors in the companys accounts and give his/her stamp of approval if they are found truthful. In some countries it is mandatory for all publicly held companies to distribute their annual report to all shareholders. In addition to the annual report, shareholders can find more information about the corporation in their "10k" and "10Q" reports. 10K report is a detailed document on the corporations services, products, market share, competition, industry, its customer base, etc. On the other hand the 10Q report gives an elaborate analysis of the companys quarterly earnings. These documents are made easily accessible through the Security and Exchange Commissions website. There are three important financial components to annual reports. They are the Income Statement, Balance Sheet and the Cash Flow Statement. Apart from these major financial components, other information of interest is also included. For example, the Chairmans Address to the Shareholders, Highlighting of major achievements over the year, Managements assessment of the year, an auditors note and a summary of all financial information. Having said this, there is no universally accepted format for annual reports. This gives opportunity for corporations to show an impressive set of numbers, the reality of which can be deciphered only by reading the fine print. For example, some companies see annual reports as a marketing tool that projects the company in a kinder light. So much so that many corporations allocate huge quantities of money in adding frills to their annual reports, making the information look more