Abstract:
A number of studies conducted, and reports published, by international and local accounting bodies have
found that the proliferation of disclosures in financial reports has hampered users’ understanding of these
reports. The reports by accounting bodies also indicate that these users prefer more concise financial
reports. These findings, in conjunction with a dearth of recent questionnaire-based research on whether
individual shareholders understand the content of financial reports, resulted in this study on whether
individual shareholders understand the content of interim reports. The study provides empirical proof that a
sound knowledge of business, accounting and economic matters is a prerequisite for understanding interim
reports in the case of individual shareholders. The results of the study indicate that individual shareholders
have a limited understanding of the content of interim reports as a whole, and that a good knowledge of
business and economic matters and of accounting results in an improved understanding of the content of
interim reports. In particular, specialisation in accounting in undergraduate and postgraduate degrees,
professional qualifications, and work experience in the financial field improve the understanding of individual
shareholders.
