Impression management: The case of Malaysian financial graphs

This study investigates the use and abuse of graphs in the annual reports of 100 component stocks of the KLSE Composite Index for the year 2001.It is found that 79 per cent of companies use graphs and that 8.1 is the mean number of graphs per graph-using companies. The most commonly graphed financial variables are sales, profit, EPS and DPS.Column and bar graph types are more popular than line and pie graphs for both KFVs and non-KFVs.The two former accounts for 98 percent of KFVs and 75 per cent of all graphs.However, line and pie graphs are more likely found for the non-KFVs than the KFVs.Though there is widespread use of graphs by Malaysian companies, available evidence point to the direction that Malaysian companies are not quite sophisticated users of graphs as their counterparts in the western developed countries such as U.S and U.K. This is especially clear when it concerns impression management practices of selectivity and measurement distortion where the evidence is moderately supportive of studies overseas. This is perhaps expected knowing that the Malaysian stock market is not as strong as those in the U.S and the U.K