The impact of graph slope on rate of change judgments in corporate reports

Beattie, V. and Jones, M.J. (2002) The impact of graph slope on rate of change judgments in corporate reports. Abacus, 38(2), pp. 177-199. (doi: 10.1111/1467-6281.00104)



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The use of graphs to disclose financial information in annual reports represents a significant dimension of financial disclosure management. Statistical graphics studies demonstrate that the accurate visual decoding of a graph is contingent upon the graph's slope parameter. This article reports two related studies into the slope parameter in a financial reporting context. A laboratory experiment indicates that sub-optimal slope parameters produce distorted judgments of corporate performance and an examination of the graphical formatting choices of 240 large U.K. companies indicates material departures from the optimal slope parameter. Policy implications are discussed.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Beattie, Prof Vivien
Authors: Beattie, V., and Jones, M.J.
Subjects:H Social Sciences > HF Commerce > HF5601 Accounting
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Abacus
Publisher:Blackwell Publishing
ISSN (Online):1467-6281
Copyright Holders:┬ęBlackwell Publishing, Inc
First Published:First published in Abacus 38(2):177-199
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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