Impression Management - an empirical investigation of the use of graphs in annual reports in Europe

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Graphs are a powerful tool which affect a reader’s impression and decision making because they attract attention, support the human ability to perceive information, and “a picture” tends to stay in the memory longer than plain numbers. Previous studies emphasize that graphs in annual reports have a long tradition of being distorted and misleading in order to give a more favourable impression of the company’s performance. This paper contributes to the knowledge of impression management by answering the quest for more longitudinal studies while focusing on not only KFV but all variables depicted in annual reports in a fragmented reporting area like Europe. This study therefore uses annual reports over a period of 7 years (2006, 2009 and 2012) of the top 50 European companies listed in the fortune 500 index resulting in 4,683 graphs for analysis. The study reveals that two of the three major ways of how impression management normally occurs can be detected: selectivity (companies tend to be selective in the topics and the length of the times series depicted) and graphical measurement distortions (31.7% of the graphs show unproportional changes in their magnitude according to RGDI). Overall, our findings for European companies are consistent with previous studies that companies primarily produce graphs in order to influence the perception of their stakeholders in a favourable way rather than to display the topics in accordance with the “true and fair view” that is requested by the IASB.
Original languageEnglish
Title of host publicationProceedings in Finance and Risk Series'14
Publication statusPublished - 2014
Event14th FRAP - Finance, Risk and Accounting Conference - Oxford, United Kingdom
Duration: 22 Sept 201424 Sept 2014


Conference14th FRAP - Finance, Risk and Accounting Conference
Country/TerritoryUnited Kingdom


  • graphs
  • annual reports
  • impression management
  • visual analysis

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