In this section, the literature existing so far has been studied and collated. The majority of topics that formed a part of discussion within the appraised literature documents involved annual reports, letters to shareholders, theme analysis, impression management and comparison of two regions from a cultural context.
3.1 Corporate Annual Report
This section throws light on the importance of clear and accurate financial reporting for a company, with an aim to maintain the relationship with the investors or shareholders. Separation of management and ownership governs how financial information is shared by a corporation with its shareholders (Laskin, 2018). During the late 19th century, there arose a need for financial communication, development of management as a scientific discipline and requirement of accountability from the company to its investors as a result of this separation of management and ownership. (Laskin, 2010, 2018). Consequently, in todays times, an important contributor to a companys corporate value is the disclosure of its financial information (Argenti, 2007; Laskin, 2016). To help public understand the fair value of a corporation, issuers of public securities were obliged to disclose pertinent information to the public, as per the Securities Act of 1923 and Securities Exchange Act of 1924 (Laskin, 2018). Thompson, former President of the National Investor Relations Institute, explains: The role of investor relations is to minimize investor risk by assuring that the company is providing information that is clear and understandable through means that achieve full and fair disclosure (Allen, 2002, p. 209). The publicly traded corporations maintain a section called Investor relations on their company website. This page consists of Reports and Presentations from the Annual General meetings and financial details such as quarterly reports, 10-Q, 10-K and Annual Reports or Corporate Annual Reports. U.S. Securities and Exchange Commission (SEC) mandates all corporations to file reports with them, ensuring universal public access to these important documents (Laskin, 2018).
Anderson and Epstein (1995) and ODonovan (2001) note that among all, annual report is the most important public document that has the power to influence the way financial markets and the general public including potential investors perceive a company. Penrose (2008) Investors consult annual reports whenever they consider purchasing or selling the stock. Rosenkranz and Pollach (2016) note that journalists also rely on annual reports, but news media also select and interpret corporate information when transforming corporate press releases into news reports (p. 104). Framing of results, shaping of perceptions, and management of expectations, in addition to disclosure of information, are some of the objectives of annual reports (Laskin, 2014, 2018; Rutherford, 2005; Sedef & Weetman, 2002). Bhatia (2004) writes that although the stated purpose may be to inform the readers, who are the stakeholders in the company, about the performance of the company in the past year (p. 16), the actual rationale is to downplay any indications of negative performance to highlight positive aspects for future growth (p. 16).