Abstract

ACCOUNTING AND BUSINESS RESEARCH The Private Shareholder: his Sources of Financial Information and his Understanding of Reporting Practices T. A. Lee and D. P. Tweedie In order to function effectively, the reporting account- and content, and find them relevant to their ant must communicate with private shareholders in investment decisions. such a way that they both read and understand the (4) Those respondents who do not read annual messages he transmits. Failure to communicate reports at all, or who read them only briefly, adequately may well result in an individual share- either believe that they understand them but do holder either relying totally on professional advisers not find them relevant to their investment decis- or becoming a passive investor who pays little atten- ions, or do not believe that they understand them sufficiently to be of use in their investment deci- tion to his investment. Alternatively, he may use sions. other available sources of information in his decision (5) Those respondents who read thoroughly annual making activities. reports do have a general understanding of We are researching private shareholder use and understanding of available financial information in a accounting and reporting practices. project funded by The Institute of Chartered