Credibility of Financial Reporting

Abstract

In this study an attempt is made to study the credibility of financial reporting from individual investors perspective. To do so structure interviews were carried out from different individual investors in different brokerage houses. There were investors trading on the basis of their accounting qualification as well those who just trade on the basis of their prior experience. The analysis indicate that rational investors do consult financial statements before making an investment decision and rely on other intermediary resources like stock brokers and print media as well. The analysis also revealed that credibility and timeliness are the most important features of annual reports. Beside this non-financial information also carries wait and investors do carry out technical analysis as well in order to make investment productive.