Annual corporate information: importance and use inSaudi Arabia

Abstract

This study examines the perceptions of the users of annual corporate reports in Saudi Arabia. The focus is on the use and importance of the seven different sources of corporate information contained in Saudi annual reports. This includes the board of director's report, the auditor's report, the balance sheet, the income statement, the statement of retained earnings, cash flow statements and the notes to the financial statements. Our sample comprises five major user groups, namely individual investors, institutional investors, creditors, government officials, and financial analysts. In comparison with previous research efforts elsewhere around the world, this study found that the balance sheet and the income statement are the most important sections of the annual report to most of the Saudi users’ groups. The board of directors’ report was found to be the least popular. As far as the cash flow statement is concerned, the individual investors were found to place much less importance to this statement, a finding that is similar to what has been reported in previous literature about investor behaviour in other areas of the world.