| Summary: | This study examines the disclosure of forward-looking information in annual
reports of companies listed on Zimbabwe Stock Exchange (ZSE). It aims to
determine if ZSE listed companies disclose forward-looking information and if they
do disclose, how helpful the information is to the intended users of the annual
report for decision making purposes? The factors proposed for the investigation
are therefore disclosure and effectiveness of the forward-looking information.
Since the annual reports represent the main source of voluntary disclosures of
forward-looking information, the investigation uses a disclosure index based on an
analysis of the statements made by management in annual reports of the
companies listed on ZSE.
In this study, the level of forward-looking information disclosed in the annual
reports of the firms is examined in three broad categories namely, (a) context,
nature, objectives and strategies, (b) drivers of development and performance,
and (c) financial position, analysis and explanations . We find that companies do
disclose forward-looking information. However, 9 out 10 companies sampled
reflect that the level of disclosure lacks the critical detail and clarity necessary for
decision making by its intended users. On average, excluding Old Mutual that is
listed on the London and Johannesburg Stock Exchanges and has the highest
score of 4 (i.e. above average disclosure - information is rich and detailed and
contains key information), ZSE companies disclosed below average forwardlooking
information insufficient to give a clear understanding of the position and
performance of the company.
The findings also suggest that companies disclosed forward-looking information
without fully understanding the implications of the disclosure of such kind of
information. This is evident in that, except for Old Mutual, no disclaimers or any
notes were made by companies to cover themselves from litigations that could
arise as a result of such disclosure. This could also suggest that Zimbabwe is not
a litigious country in as far as reporting by companies is concerned. === Graduate School of Business Leadership === MBL
|
|---|
