An annual report is a comprehensive

report A report is a document that presents information in an organized format for a specific audience and purpose. Although summaries of reports may be delivered orally, complete reports are almost always in the form of written documents. Usage In ...

on a company's activities throughout the preceding

year A year or annus is the orbital period of a planetary body, for example, the Earth, moving in its orbit around the Sun. Due to the Earth's axial tilt, the course of a year sees the passing of the seasons, marked by change in weather, the h ...

. Annual reports are intended to give

shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal o ...

s and other interested people information about the company's activities and financial performance. They may be considered as

grey literature Grey literature (or gray literature) is materials and research produced by organizations outside of the traditional commercial or academic publishing and distribution channels. Common grey literature publication types include reports ( annual, r ...

. Most jurisdictions require companies to prepare and disclose annual reports, and many require the annual report to be filed at the company's registry. Companies listed on a stock exchange are also required to report at more frequent intervals (depending upon the rules of the stock exchange involved).

Content

Typical annual reports may include: * General corporate information * Operating and financial review * Director's Report *

Corporate governance Corporate governance is defined, described or delineated in diverse ways, depending on the writer's purpose. Writers focused on a disciplinary interest or context (such as accounting, finance, law, or management) often adopt narrow definitions ...

information *

Chairperson The chairperson, also chairman, chairwoman or chair, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the grou ...

s statement * Auditor's report *

Sustainability Specific definitions of sustainability are difficult to agree on and have varied in the literature and over time. The concept of sustainability can be used to guide decisions at the global, national, and individual levels (e.g. sustainable livi ...

and ESG information * Contents: non- audited information * Financial statements, including **

Balance sheet In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business ...

also known as Statement of Financial Position **

Income statement An income statement or profit and loss accountProfessional English in Use - Finance, Cambridge University Press, p. 10 (also referred to as a ''profit and loss statement'' (P&L), ''statement of profit or loss'', ''revenue statement'', ''stateme ...

also known as profit and loss statement. **

Statement of changes in equity A statement of changes in equity and similarly the statement of changes in owner's equity for a sole trader, statement of changes in partners' equity for a partnership, statement of changes in shareholders' equity for a company or statement of cha ...

Cash flow statement In financial accounting, a cash flow statement, also known as ''statement of cash flows'', is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to op ...

* Notes to the financial statements *

Accounting Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...

policies * Independent assurance statements * Other features Other information deemed relevant to stakeholders may be included, such as a report on operations for manufacturing firms or corporate social responsibility reports for companies with environmentally or socially sensitive operations. In the case of larger companies, it is usually a sleek, colorful, high-gloss publication. Research has found that annual reports that convey optimistic tone are associated with lower audit fees, suggesting that annual report tone reflects factors that auditors consider in assessing audit risk. The details provided in the report are of use to investors to understand the company's financial position and future direction. The financial statements are usually compiled in compliance with IFRS and/or the domestic GAAP, as well as domestic legislation (e.g. the SOX in the U.S.). In the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

, a more-detailed version of the report, called a Form 10-K, is submitted to the U.S. Securities and Exchange Commission. A publicly held company may also issue a much more limited version of an annual report, which is known as a "wrap report." A wrap report is a Form 10-K with an annual report cover wrapped around it.

Directors' Role

Statement of Directors' responsibilities for the shareholders' financial statements The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable

Law of the Republic of Ireland The law of Ireland consists of constitutional, statute, and common law. The highest law in the State is the Constitution of Ireland, from which all other law derives its authority. The Republic has a common-law legal system with a written const ...

, including the accounting standards issued by the Accounting Standards Board and published by The Institute of Chartered Accountants. Irish company law requires the directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the Directors are required to: * select suitable accounting policies and then apply them consistently * make judgements and estimates that are reasonable and prudent * prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business The directors confirm that they have complied with the above requirements in preparing the financial statements. The directors are responsible for keeping proper books of account that disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and with Irish statute comprising the Companies Acts 1963 to 2009...

History

In 1903,

US Steel United States Steel Corporation, more commonly known as U.S. Steel, is an American integrated steel producer headquartered in Pittsburgh, Pennsylvania, with production operations primarily in the United States of America and in several countries ...

published an annual report whose financial accuracy was certified by Price, Waterhouse & Co in what is known as the earliest modern corporate annual report.

'Alternative' annual reports

Certain groups such as The True Cost Of Chevron Network have released 'alternative' annual reports as a way to highlight ongoing environmental destruction and/or

human rights abuses Human rights are moral principles or normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for certain standards of h ...

committed by a particular company.The True Cost Of Chevron, An Alternative Annual Report, May 2011 http://truecostofchevron.com/2011-alternative-annual-report.pdf Retrieved 19 July 2017

References

External links

How to Efficiently Read an Annual Report
*
How to Read a 10-K Like Warren Buffett
by

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