An Empirical Investigation into the Importance, Use, and Technicality of Saudi Annual Corporate Information

Abstract

Abstract This study examines the perceptions of the users of annual corporate reports in Saudi Arabia. The focus is on the use, importance, and technicality of the different sources of corporate information contained in Saudi annual reports. 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. Individual investors were found to place much less importance on the cash flow statement, a finding that is similar to what has been reported in previous literature. Concerning the technicality of the language of Saudi annual corporate information, individual investors indicated that the language of most of the sections of the annual reports is fairly complicated. Although our findings do not indicate a serious problem with the technicality of the language of the report's sections for most of the user groups, a more simplified report would be beneficial to the individual investors.