Business Reporting: Financial Analysts’ Expectations for Management Disclosures

Clay Macfarquhar, Massey University
Stuart Tooley, Queensland University of Technology

Abstract: It is to be expected that managers will provide sufficient disclosure to enable informed assessments of firm performance and firm value. Through an investigation of the performance indicators used and/or desired by Australian and New Zealand financial analysts, this study identifies a state of continuing information asymmetry. The empirical results indicate that key performance drivers are under-reported, especially in regard to measures of product quality and customer satisfaction, product and process innovation, and the competitive environment. Managers need to take cognisance of the importance for disclosure of non-financial operational-type information that focus on factors which create longer term value to complement the traditional reporting.