Members and Contributions:

Carpen, Angela= #1 & #2

Jarder, Adeline= #3 & #4
Quimanhan, Jasper= #6
Sollesta, Pfritzee= #5



1. Identify and discuss the basic factors of communication that must be considered in
the presentation of this information.

The annual report must be clear to its users and its details must be brief and accurate.
This is to avoid any confusion in the part of the users of the information especially because
they couldnt immediately raise their concerns and objections if they have any.

The language to be used in the report should also be considered. The preparer of the
annual report must try to communicate to the users of the information in a common
language which both parties could easily understand and agree.

The preparer should also consider the sequence of reporting. It may be through
importance of information or logical ordering, etc.


2. Discuss the communication problems a corporation faces in preparing the annual
report that result from the diversity of the users being addressed.

There are a lot of information that an organization should report. Sometimes, to avoid
having a dragging report and in their effort to remove unnecessary information, they at
times reduce the information into generalizations which omits several important details
that users need.

Different users have different needs so the preparer of the report try to cater them all.
Some information may be useful to others while useless to some.

3. Select two types of information found in an annual report, other than the financial
statements and accompanying footnotes, and describe how they are helpful to the users
of annual reports.
Management's discussion and analysis of results.
Users of these reports may find them helpful in terms of collective bargaining
agreement. It also provides understandable financial statements which are
useful to a wide range of users in making important business economic
decisions. It may also be used to evaluate whether a business is worth
investing.

Recent stock price history and stock information.
Stock prices together with the paid dividend on stocks may affect the return
on investment earned by a person investing in stocks. Full knowledge on the
stock prices and information may allow users to know if they have a great deal
to do with whether the investor makes money on his or her investment and if
how much they can earn from that investment.


4. Discuss at least two advantages and two disadvantages of stating well-defined
corporate strategies in the annual report.

Advantages:
Well-defined corporate strategies may promote confidence and build a positive
image to clients.
It becomes a hub for conveying the strengths of the company.

Disadvantages:
May cause rigidity due to full commitment of the management to the stated
objectives and strategies.
Involves risk through an open communication to all users of information including
the competitors.


5. Evaluate the effectiveness of annual reports in fulfilling the information needs of the
following current and potential users:

a. Shareholders. These annual reports help possible shareholders in evaluating the
risks and returns involved on a given investment. Such information includes net
income from operations, earnings per share, the FS such as the Balance Sheet,
Cash Flow Statement, and related footnote disclosures. Information overload may
occur due to various data gathered every day and which will eventually diminish
the value of such reports. This can create confusion in the part of the shareholders
due to theory simplification from technical to common.
b. Creditors. The annual reports allow creditors to identify whether the company is
able to service its debts or pay its obligations when they come due and if the
company is able to continue in the business.
c. Employees. These reports give the employees an overview of their salaries,
incentives and the benefits theyll receive from the company. Employees will use
this information in choosing what company gives the best employee benefits.
Furthermore, annual reports also provide the employees the core aspects of the
company and all their annual contributions in the company.
d. Customers. The customers are provided with information regarding the business
status of the company which they can use in assessing the performance of the
company both of the past and the present.
e. Financial analysts. Financial analysts used the audited financial statements as
basis for audit analysis. As presentation of additional details and accounting
policies, notes of the financial statements are also being used. But some data may
already be too summarized. Financial analysts also need additional information in
order to further ease their analyses.

6. Annual reports are public and accessible to anyone, including competitors. Discuss
how this affects decisions about what information should be provided in annual
reports (CMA Examination, adapted)

Due to the annual reports being numerous and open to public, companies may
incur gaps which can give competitors an advantage to access such information. Thus,
it is very important for the company to give out only as much information as possible
without giving a competitive edge to other companies by omitting the confidential ones.