Original Research

The incidence and quality of graphs in annual reports: A South African analysis of graph disclosure in state-owned entities

Anees Kathrada, Yaeesh Yasseen, Zakiyyah Varachia
Africa’s Public Service Delivery & Performance Review | Vol 9, No 1 | a513 | DOI: https://doi.org/10.4102/apsdpr.v9i1.513 | © 2021 Anees Kathrada, Yaeesh Yasseen, Zakiyyah Varachia | This work is licensed under CC Attribution 4.0
Submitted: 25 November 2020 | Published: 30 November 2021

About the author(s)

Anees Kathrada, School of Accountancy, Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, South Africa
Yaeesh Yasseen, School of Accountancy, Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, South Africa
Zakiyyah Varachia, School of Accountancy, Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, South Africa

Abstract

Background: South African state-owned entities (SOEs) have become synonymous with issues such as poor service delivery and wasteful expenditure. State-owned entities are accountable to various stakeholders with the annual report viewed as an accountability mechanism. Given the different components of the annual report, this provides management with the opportunity to use different elements to present a better image of the SOE. Some elements that can be used to manipulate information are graphs.

Aim: The purpose of this study was to analyse the use of graphs in the annual reports of SOEs and to conclude whether SOEs use graphs to manipulate information presented.

Setting: The annual reports of the 277 SOEs included in the Public Finance Management Act (PFMA) schedules as of 31 March 2018 were analysed.

Methods: This study followed a quantitative research method. Content analysis is used to identify impression management techniques used in the graphs of SOEs.

Results: The findings indicate that 64% of SOEs present graphs in their annual reports, with non-financial graphs being disclosed more than financial graphs. Using the graph discrepancy index (GDI), it was found that SOEs tend to overstate data trends more than understating trends resulting in a better image of the SOE being presented. The presentational features of graphs were not used excessively to influence users.

Conclusion: Graphs appear to be used as a form of impression management to manage users’ perceptions of SOEs. Given the impact of the annual report on users’ decision, the distortion of graph may impact the decisions taken.


Keywords

annual report; graph; impression management; measurement distortion; presentational enhancement; state-owned entities

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Crossref Citations

1. Os fatores explicativos da eficácia da análise da informação não financeira nos diferentes níveis de complexidade da tarefa
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