Web-based financial statements: hypertext links to footnotes and their effect on decisions

Abstract

During the past 20 years, researchers have explored how differences in presentation format of information affect user decisions. Recently, the Internet has provided a new vehicle for companies to distribute a variety of financial information, including financial statements and annual reports. This exploratory study examines the effect of different presentation formats on users' judgments by studying the effect of hypertext links on users' decisions and predictions, the amount of information accessed, and the time used to make decisions. Two test companies (one large, one small) were used in the study. For the large company, the results show no differences when using financial statements prepared with or without hypertext links. For the small company, significant differences were found in predictions, the amount of information accessed, and the time to make decisions. These findings imply that under some circumstances, the use of hypertext links in financial statements may affect users' judgment processes.