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International Journal of Commerce and Management

An empirical investigation of users' views on corporate annual reports in Qatar


Jalal M. Alattar Khalid Al-Khater
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To cite this document:
Jalal M. Alattar Khalid Al-Khater, (2008),"An empirical investigation of users' views on corporate annual
reports in Qatar", International Journal of Commerce and Management, Vol. 17 Iss 4 pp. 312 - 325
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IJCOMA
17,4 An empirical investigation
of users views on corporate
annual reports in Qatar
312
Jalal M. Alattar and Khalid Al-Khater
Department of Accountancy, University of Qatar, Doha, Qatar

Abstract
Purpose This study is the first attempt to explore in depth users views on corporate annual reports
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in Qatar, which has a rapidly growing economy and underdeveloped accounting systems.
Design/methodology/approach A questionnaire was distributed to 80 individual investors,
40 institutional investors, 30 financial analysts, 30 bank credit officers and 40 government officers who
are involved with investment decisions. A total of 150 completed questionnaires were returned giving
a response rate of 68 percent. Descriptive statistics and Kruskal-Wallis and Mann Whitney tests were
used to analyze the results.
Findings The respondents considered annual reports to be important and useful and to be the main
source of information for investment decisions. The respondents rated the balance sheet, auditors
report, cash flow statement, income statement and notes to the accounts as the most important and
understandable sections in the annual reports. Additionally, respondents considered government
publications and newspapers, magazines and journals to be very important sources of up to date,
useful and easy to access information. Respondents differed significantly in their perceptions about the
importance of the cash flow section, the use of accounting information for monitoring investment
decisions and the use of other available sources of information.
Research limitations/implications Findings reported in the paper reveal the need for research
into the reasons for such differences and also may help accounting association bodies in Qatar to play
an active role in improving users awareness of the importance and usefulness of corporate annual
reports when making investment decisions.
Originality/value This project explores what sections of the corporate annual reports are most
important to the users in the state of Qatar which has unique attributes in terms of its economic and
accounting developments. Several findings are particularly relevant for preparers of corporate annual
reports in this unique developing country. Although several studies investigated this issue in
developing countries such as the Kuwait, Saudi Arabia, Bahrain, Jordan and Iran, the findings of these
studies might not be generalized on Qatar.
Keywords Annual reports, Investments, Qatar
Paper type Research paper

Introduction
Qatar is a developing country that gained its independence in 1971 and its economy
is dominated by the oil and natural gas sectors. There is little public information
available about accounting practices in Qatar. The accounting environment is
notably different than that of other countries. A gap exists between the degree of
International Journal of Commerce economic development and that of the accounting systems development (Al-Khater
and Management and Nasser, 2003).
Vol. 17 No. 4, 2007
pp. 312-325 In recent years, Qatars economy has rapidly grown due to the increased oil and gas
q Emerald Group Publishing Limited
1056-9219
production, high-energy prices and economic diversification, boosting the GDP
DOI 10.1108/10569210710844381 per capita from $31,897 in 2003 to 36,476 in 2004. This led the country to have a growth
rate of 8.4 percent which was the highest of that in the Gulf Cooperation Council (GCC) Corporate annual
countries, and to become one of the richest countries in the world (Qatar National Bank reports in Qatar
QNB, 2005).
Qatar has a very new securities market, called Doha Securities Market (DSM) which
has been opened in 1997. Recently, the market includes only 30 public companies.
Lately, the DSM was opened for non-Qatari nationals to own and trade with 25 percent
from the capital of each listed company in order to improve the investment climate, 313
attract more investors and accelerate the economic development.
While the economy in Qatar has rapidly grown, the accounting systems remained
undeveloped. For example, Qatar has neither established it own accounting standards
nor adopted the International Accounting Standards (IASs). Qatar has no professional
accounting bodies responsible for setting the generally accepted accounting standards
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for the country and for developing the countrys accounting profession. Additionally,
the DSM does not require listed companies to use specific accounting standards.
Only local banks are requested by the QNB to follow the (IASs) and to have annual
independent audits performed by two external auditors from one of the international
accounting firms (Big four)[1]. Most of the public companies operating in Qatar are
influenced by their external international auditors to use the IASs. They also required
by the new commercial companies law[2] to publish audited financial statements
within three months after the financial year is ended.
Qatar has recently established a scientific association for accountants and has
finalized the official procedures for establishing the accountants association.
From the above discussion, it is clear that Qatar has unique attributes in terms of its
economic and accounting developments. This may trigger the need for conducting
empirical research to investigate accounting related issues including financial
reporting, accounting standards establishment, and accounting practice regulation.
This study represents the first attempt to investigate the users perceptions of annual
reporting. Although several studies investigated this issue in developing countries
such as the Kuwait, Saudi Arabia, Bahrain, Jordan and Iran, the findings of these
studies might not be generalized on Qatar for the mentioned above reasons.
The remaining sections of this paper are organized as follows. The third section
reviews the previous studies that researched the importance, understandability and
usefulness of corporate annual reports. The fourth section introduces the research
questions, data collection and statistical tests used in this study. The fifth section
presents the findings of the study. The final section introduces the conclusions.

Literature review
A number of research studies (Belkaoui, 1979; Kahl and Belkaoui, 1981; Mattar, 1988;
Wallace, 1988a, b; Gniewosz, 1990; Epstein and Pava, 1993; Streuly, 1994; Abdulla,
1995; Bence et al., 1995; Anderson and Epstein, 1995; Abu-Nassar and Rutherford,
1996; Bartlett and Chandler, 1997; Alijarde, 1997; Naser and Nuseibeh, 2003; Naser et al.,
2003) have investigated the usefulness and understanding of corporate information to
the users and found annual report to be the primary source of information.
Lee and Tweedie (1975) and Wilton and Tabb (1978) found that investors
considered the income statement to be the most important section in the annual report.
Day (1986) and Yap (1997) reported that cash flow statements have become important
sources of information for users. Epstein and Pava (1993) reported that US investors
IJCOMA considered the income statement and the balance sheet more useful than the cash flow
17,4 statement. Lee and Tweedie (1975) found that the executives report was of great to
moderate importance, over one-third of the respondents considered the directors report
to be of no importance and half of the respondents stated that the auditors report could
be ignored in any investment decisions. Anderson (1981) found that users considered
the income statement, balance sheet and notes to the accounts as the most important
314 sections for making investment decisions.
Studies reported for developing countries (Solas and Ibrahim, 1992 for Jordan and
Kuwait; Wallace, 1988a, b for Nigeria; Abu-Nassar and Rutherford, 1996 for Jordan;
Chow and Wong-Boren, 1987 for Mexico; Hatif and Al-Zubaidi, 2000 for Iraq; and
Naser and Nuseibeh, 2003 for Saudi Arabia) gave mixed results. Similarities and
differences were observed between developed and developing countries. Users in
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developing countries do not perceive themselves as suffering from difficulties in


understanding the information in the annual reports.
Daniels and Daniels (1991) concluded that the information contained in financial
statements is necessary and useful but not sufficient to evaluate the financial condition
of a company. Though user groups of annual reports in developing countries feel that
there has been some improvement in reporting in recent years, they wish to receive
more information than is currently provided (Abu-Nassar and Rutherford, 1996; Hatif
and Al-Zubaidi, 2000; Naser and Nuseibeh, 2003). Dye and Bowsher (1987) found that
most users want an annual report to contain other information which increases their
understanding. Hay and Antonio (1990) found that users of annual reports wanted
highly detailed disclosures. Anderson (1981) found that users desired information on
future prospects, company products, divisional performance, the provision of
management audit reports, and publication of quarterly reports. Benston (1976)
reported that financial press and newspaper reports were considered to be the most
important source of information other than the annual report.
In summary, the results from previous studies show that users of annual reports
generally regarded annual financial reports as important sources of information;
though each section was not regarded as being of equal significance. Income statement
data were regarded as a primary information source with liquidity data being largely
ignored, or being regarded as secondary material when analyzing corporate results.
The results also reveal a necessity to introduce some changes to the annual reporting
that allow the information to be more understandable and adequate for potential users.
In addition to the annual reports, financial press reports, newspaper and magazines
were reported to be important sources of information.

Objectives of the study


The main purpose of this study is to report the findings of an empirical investigation
into the importance, understanding and usefulness of corporate annual reports to
individual and institutional investors, bank loan officers, financial analysts and
government officials in Qatar.
In order to achieve its objectives the study will seek answers to the following
questions:
.
How different external user groups of the corporate annual reports in Qatar
perceive the importance of the various sections of these reports?
.
How different external user groups of the corporate annual reports in Qatar Corporate annual
perceive the understandability of the accounting information contained in these reports in Qatar
reports?
.
How different external user groups of the corporate annual reports in Qatar
perceive the usefulness of the various sections of these reports?
.
How different external user groups of the corporate annual reports in Qatar
perceive the importance of available sources of information other than these 315
reports?
.
How different external user groups of the corporate in Qatar perceive the most
important possible reasons for using sources of information other than these
reports?
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Data collection
A perception questionnaire was used to collect data needed for the study. An Arabic
translated questionnaire with a list of explanations to some terminologies was piloted
and then modified in light of valuable comments and feedback. The questionnaire was
divided into three parts. The first part sought general information on the respondents
background profile (socio-economic profile). The second part of the questionnaire was
related to the respondents opinion regarding the level of importance, understanding and
usefulness of the various sections of the corporate annual reports. The third part of the
questionnaire sought two types of information. The first type was related to the level of
importance given by the different external user groups to the use of information
from sources other than corporate annual reports when making investment decisions.
The other type was about the reasons behind such perception. The respondents
were requested to indicate their opinion on a five-point Likert scale in terms of very
important, very understandable, very useful or strongly agree to not important
at all, not understandable at all, not useful at all or strongly disagree.
The questionnaire was distributed to 80 individual investors, 40 institutional
investors, 30 financial analysts, 30 bank credit officers, 40 government officers who are
related to investment decisions. All samples were drawn at random, and personal
interviews were also conducted whenever they were available. The questionnaire was
delivered by hand. In the majority of cases, the questionnaire was discussed with the
person completing it with the assistance provided by students of University of Qatar
who were attending the course entitled Research Methodology at the time of the study.
About 150 responses were received from the 220 questionnaire delivered,
representing a response rate of 68 percent. The responses received from the
questionnaire delivered are shown in Table I.

Targeted group Number surveyed Number of usable responses Resp. rate

Individual investors 80 66 82.5


Institutional investors 40 28 70
Bank loan officers 30 18 60
Financial analysts 30 17 56.6 Table I.
Government officials 40 21 52.5 Targeting groups and
Total 220 150 68 response rate
IJCOMA Descriptive statistics namely frequencies (counts and percentages) and measures of
17,4 central tendencies (mean and standard deviation) were used for data analysis. These
techniques provide a summarized overview of the entire data set which enables the
researchers to have an idea of the characteristics for the data (Sekaran, 1992). In
addition to the descriptive statistics, Kruskal-Wallis and Mann Whitney tests were
used to determine whether or not the mean responses of the five user groups are
316 significantly different. The tests were carried out for significance at the 5 percent
confidence level in order to confirm the results of significant differences among means.

Research findings
Respondents background
As shown in Table II, the respondents were predominantly male (85 percent),
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indicating a low participation of females in the investment decisions in Qatar. Of the


respondents 60 percent were Qatari. Most of the respondents (81 percent) had a
bachelor or higher degree. The respondents most common majors in college were
accounting, business and finance (more than 65 percent). Half of the respondents were
equipped with a significant accounting and finance knowledge.

Perceived importance of annual report sections


The annual report was divided into eight sections and the respondents were asked to
indicate to what extent these sections are important when making investment
decisions. Table III provides a summary of the average mean perceived importance of
the different sections of the corporate annual report to the user groups, the standard
deviations and the significance differences in the mean.
It can be seen from the table that the eight sections of the annual report were considered
remarkably important to user groups in Qatar, implying that they all are relevant for
investment decision making with the balance sheet being of the most importance.

Gender Nationality Education Major in college


Below Above None
M F Qatari None bachelor Bachelor bachelor Business business
Table II. (percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent)
Respondents
background 85 15 66 34 19 58 23 65 35

Kruskal Wallis test


Annual report sections Average mean SD Rank X2 Significance

Balance Sheet 4.65 0.704 1 8.00 0.091


Auditors report 4.48 0.84 2 9.36 0.919
Cash flow statement 4.32 0.94 3 26.36 0.000
Income Statement 4.30 0.919 4 6.60 0.159
Table III. Executives report 3.95 0.96 5 4.92 0.295
Users perception on the Notes to the accounts 3.95 0.99 5 5.48 0.241
importance of annual Directors report 3.92 1.03 7 4.12 0.389
report sections Accounting policies 3.88 1.11 8 9.27 0.055
Like the results reported for developed and developing countries, the ranking of the Corporate annual
different sections of the annual report showed a strong consistency for user groups in reports in Qatar
respect of the traditional financial statements balance sheet, income statement, cash
flow statement and notes to the accounts. This supports the view that all three
financial statements are considered to be complementary (Yap, 1997).
Contrary to the findings reported for developed countries, and like the results
reported by Wallace (1988a, b) and Abu-Nassar and Rutherford (1996) for developing 317
countries, the audit report was ranked the second most important by the user groups.
This result reflects the high level of reliability that user groups in Qatar attach to the
corporate financial reports as these reports are audited by International Accounting
Firms (Big Four).
Unlike the results reported for developed countries, the importance of the income
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statement is secondary to that of the cash flow statement, revealing a higher interest in
the latter. This probably implies that those users groups in developing countries in
general and in Qatar specifically are more concerned about liquidity, solvency, and
financial flexibility than profitability.
Like the results reported for developed countries, the directors report and executives
report were rated as being of moderate importance. This means that user groups may
rely heavily upon these two reports probably to obtain information either not included in
the financial statements or less complicated for investment decision making. The lowest
most important section was accounting policies. Although this section was ranked at the
bottom of the list, it was rated as being of moderate to great importance.
The results of Kruskal Wallis test revealed that the cash flow section was the only
section of the annual report that the user groups have significant differences regarding its
degree of importance. This is not unduly surprising as the findings reported by Lee and
Tweedie (1975), Wilton and Tabb (1978) and Yap (1997) for developed countries revealed
that individual and institutional investors have little interest in the cash flow statement as
they are not a sophisticated group and may not pay too much attention to such a statement.
The results of the Mann Whitney test gave support to this argument by indicating that the
individual investors group and bank official groups are significantly different from
institutional investors group and the government officials group regarding their view
about the importance of the cash flow statement. Also, the bank loan officers group is
significantly different from the institutional investors group and financial analysts group
and the financial analysts group is significantly different from the individual investors
group regarding their view about the importance of the accounting policies section.

Perceived understandability of the annual report sections


Table IV provides a summary of the perceived understandability of each section to the
five user groups. It also reports the significant differences between the user groups
regarding their views on the understandability of these sections.
Like the results reported by Lee and Tweedie (1976) for UK and Abu-Nassar and
Rutherford (1996) for Jordan as a developing country, the user groups understand all
sections of the annual report. The accounting policies is the least understandable
section though its mean was 3.6. It is interesting, however, to mention that
the traditional financial statements balance sheet, note to the accounts, income
statement and the statement of cash flows are the most understandable sections in the
annual report.
IJCOMA The balance sheet was rated the most highly, and the auditors report was rated the
forth by all user groups. This contradicts with Abu Nasser and Rutherfords (1996)
17,4 study which revealed that the auditors report was the most understandable section of
the annual report while the balance sheet was the forth. This is not surprising because
20 percent of their survey population was drawn from academics whom usually are
very familiar with auditing reports in general and with auditing terms specifically.
318 While the notes to accounts and accounting policies sections were the least to
understand by the individual investors group, these two sections were very well
understood by the bank loan officers. One explanation to the difficulty found by
individual investors in understanding these two sections lies probably in the technical
information contained in them which may need individuals with a higher level of
accounting education and experience to understand.
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The results of the Kruskal Wallis test revealed that although user groups views
regarding their understandability of balance sheet, auditors report, statement of cash
flow and accounting policies were significantly different, they shared similar views on
their understandability of income statement, notes to the accounts and directors and
executives reports. In this regard the results of the Mann Whitney test revealed that
the institutional investors group differed from the individual investors group
regarding the income statement, directors and executives report, cash flow statement
and accounting policies sections. The institutional investors also differed from the
bank loan officers regarding the cash flow statement, accounting policies, balance
sheet and auditors report sections. Furthermore, it differed from financial analysts
group regarding cash flow statement, and accounting policies. Finally, it differed from
government officials group regarding the auditors report section.
These differences could be attributable to the inability of some user groups such as
individual investors to understand some sections in the annual reports. This probably
reveals a necessity to introduce some changes to these sections allowing the information
to be more understandable for these particular user groups (Alijarde, 1997).

Perceived usefulness of accounting information contained in the annual report sections


In order to determine that accounting information contained in the financial reports is
useful for investment decisions, respondents were given six statements and were asked
to indicate their level of agreement with each statement. As shown in Table V, all five
user groups assigned an average usefulness mean above 3.5 to each of the given six
statements, revealing a strong agreement on the usefulness of accounting information

Kruskal Wallis test


Annual report sections Average mean SD Rank X2 Significance

Balance sheet 4.24 0.994 1 10.11 0.039


Notes to the accounts 4.14 1.33 2 5.52 0.238
Income statement 4.10 1.00 3 3.35 0.174
Table IV. Auditors report 4.03 1.18 4 10.35 0.035
Annual report users Cash flow statement 4.00 1.15 5 19.70 0.001
perception on the Executives report 3.93 1.02 6 6.61 0.158
understanding of the Directors report 3.92 1.08 7 7.15 0.128
sections Accounting policies 3.60 1.23 8 14.7 0.005
Corporate annual
Kruskal Wallis test
Average reports in Qatar
Annual report sections mean SD Rank X2 Significance

To provide primary information for making


investment decisions 4.26 0.867 1 2.61 0.624
To provide information about the companys 319
liquidity 3.97 1.05 2 9.46 0.051
To provide information for monitoring investment
decisions 3.95 0.985 3 10.40 0.034
To provide information about current profit and
return per share 3.93 1.05 4 7.46 0.113 Table V.
To provide information about the companys Users perception on the
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performance 3.93 1.07 5 8.55 9.11 uses of accounting


To provide information about the future investment information contained in
possibilities in the company 3.59 1.14 6 0.073 0.058 the annual report

contained in the annual report for investment decisions. They seem to have a
preference for using accounting information to obtain primary information (mean of
4.26) for investment decisions over the other five statements. This preference is broadly
consistent with that reported for developed and developing countries cited earlier.
Furthermore, the favorable views regarding the generation of primary information
which usually are found in the traditional financial statements (income statement, cash
flow statement and balance sheet) and notes clearly provide substantial and favorable
evidence about the attainment of the primary objective of financial reporting in Qatar
(Streuly, 1994).
The table also shows that using accounting information for liquidity purposes came
second in importance, whilst using it for liquidity purposes came fourth. This is
consistent with user groups views regarding the importance of the cash flow
statement and income statement which revealed that the later was second in
importance. Also, it reflects the strength of the interest in liquidity information.
Contrary to the findings reported by Lee and Tweedie (1975) for the UK, the use of
accounting information of the annual reports for obtaining information about the
future investment possibilities (prospect) in the company was rated the least highly.
Surprisingly, however, the use of accounting information of the annual reports for
generating information about the companys performance was ranked by user groups
as being the fifth in importance with a mean of 3.95. This possibly reflects the inability
of some user groups to utilize the quantitative performance measures. However, the
bank loan officers indicated more high agreement for this statement.
Kruskal Wallis test indicated that user groups differed significantly in their
perception about the importance of using accounting information for monitoring
investment decisions. The Mann Whitney test illustrated that the institutional
investors differed from the individual investors on using accounting information for
monitoring investment decisions. They differed from the bank loan officers and
government officials on using accounting information for knowing the current profits
and return per share. The financial analysts group differed from the institutional
investors group and government officials group on using accounting information for
generating information about the future investment possibilities in the company.
IJCOMA Finally, the bank loan officials differed from the individual investors on using
17,4 accounting data to generate information about a companys liquidity and to monitor a
companys performance.

Perceived importance of other sources of information


This study sought opinions from the respondents on the importance of other sources of
320 information namely government publications, newspapers, specialized publications,
visit to the company, share brokers advice, market rumors, and advice of friends for
investment decisions. The results are shown in Table VI.
It can be seen from the table that the first five most important sources were
considered of great to moderate importance. This degree of importance comes second
to that given by user groups to the first five most important sections in the annual
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report (Table II). From this we can reinforce the fact that the annual report is the
primary source of information to user groups in Qatar for investment decisions.
Interestingly, the most important source of information was Government
publications with a mean of 3.97. This indicates that user groups in Qatar appear
to be slightly more interested in the information published by the government than to
even the directors and executives reports and the notes to accounts. Perhaps, this may
be attributable to general concern about the reliability of information disclosed in the
government publications. However, one may expect that these publications usually
contain only a section that covers business issues without any intensive analysis but
with little benefits to the user groups.
The second most important source of information was the newspapers, magazines and
journals, having a great to moderate importance (a mean of 3.86). This result is consistent
with those reported by Benston (1976) and Lee and Tweedie (1975) for developed countries.
This suggests that user groups in Qatar as well as those in developed countries depend
mainly on news papers, magazines and journals probably due to its topical data. However,
this result contradicts with that reported by Abu-Nassar and Rutherford (1996) for Jordan.
They argued that the contrast in this regard is attributable to the different environment
that exists in developing countries. The current study found no evidence to support such
argument.
Advice investment services were considered the third most important source of
information and stock brokers advice was considered the fifth. However, both sources
had a great to moderate importance. The results illustrate the attention to the topical
data in these particular sources, and the higher reliance on the investment services for
advice.

Kruskal Wallis test


Other sources of information Average mean SD Rank X2 Significance

Government publications 3.97 1.02 1 3.95 0.412


Newspapers, magazines and journals 3.86 0.98 2 5.99 0.199
Advice from investment services 3.67 1.16 3 2.04 0.728
Table VI. Visit to company 3.61 1.18 4 2.03 0.729
Users views on the Stock brokers advice 3.38 1.13 5 0.70 0.95
importance of other Advice of friends 2.99 1.19 6 6.18 0.186
sources of information Tips and rumors 2.47 2.81 7 0.55 0.96
Visits to companies was ranked the forth most important source of information. This is Corporate annual
two levels lower than that reported by Abu-Nassar and Rutherford (1996) for Jordan. reports in Qatar
Clearly, it seems that user groups in Qatar are less dependent on visits to a company to
obtain information necessary for making investment decisions.
The least important source of information for all user groups were market rumors
and advice of friends with means of 2.47 and 2.99, respectively. Individual shareholders
regarded advice of friends a more important than other user groups. 321
The Kruskal Wallis test revealed that there were no significant differences among the
user groups in terms of their views on the importance of all sources of information other
than annual report sections. On the other hand, the Mann Whitney test illustrated
significant differences between individual investors, institutional investors and
government officials. For example, individual investors differed from institutional
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investors about the importance of advice of friends. This was expected because individual
investors would be more concerned with this source than other groups and they are very to
easily influenced by their friends who have some knowledge about the stock market.
The study also has investigated why users obtain information from sources other
than financial reports. The questionnaire introduced five possible reasons and
respondents were asked to determine the extent to which each of them is important.
The results are shown in Table VII.
The table revealed that the five possible reasons introduced to respondents were of
great to moderate importance. The first three most important reasons given for
employing sources other than annual report were that they provide new information,
they are more useful and they are easy to get information. Indeed, new information,
useful information and easy to get information are three features that can obviously be
found in the other sources of information specified earlier in Table VII as the most
important to user groups. This tends to reflect the respondents consistency in their
answers. The least important reason was that providing more relevant information
with a mean 3.45.
Kruskal Wallis test revealed significant differences between the user groups only
regarding the most important reason namely, they contain new information. The
Mann Whitney test spotted the difference among individual investors group,
institutional investors group and government officials group. It also, revealed that the
individual investors differed significantly from the institutional investors regarding
the importance of the reason namely they are prepared by a neutral party. This
difference was expected because the user groups certainly have different background
and knowledge about these sources. Also some user groups may believe that whilst
these sources provide new information, they do not serve as a better guide for them.

Kruskal Wallis test


Other sources of information Average mean SD Rank X2 Significance

They contain new information 3.77 1.17 1 10.33 0.035 Table VII.
They are more useful 3.68 1.11 2 3.69 0.449 Users views on the
They are easier to get information 3.56 1.14 3 1.32 0.858 importance of reasons for
They are prepared by a neutral party 3.52 1.21 4 9.14 0.058 employing other sources
They contain more relevant information 3.45 1.03 5 5.53 0.230 of information
IJCOMA When the most important reasons found in the current study were compared with that
17,4 reported for Jordan, remarkable differences were observed. For example, whilst user
groups in Qatar considered the reason namely they contain new information as the
most important reason, it was ranked almost the least important by the user group in
Jordan. Additionally, the reason namely they contain more relevant information was
ranked in the current study as the least most important, whilst it was ranked the
322 second most important reason by the user groups in Jordan.

Conclusions
The main purpose of this study was to investigate the perception of five various user
groups towards corporate annual reports in Qatar.
The results of the data survey analysis revealed that the eight sections of the
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corporate annual report are remarkably important to user groups in Qatar implying
that all these sections are relevant for investment decision making. Like the results
reported for developed and developing countries, the ranking of the sections showed a
strong consistency for user groups in respect of the balance sheet, income statement,
cash flow statement and notes to the accounts.
This study also is consistent with the previous studies in that user groups
understand all sections of the annual report.
The results of this study indicated that the traditional financial statements the
balance sheet, note to the accounts, income statement and the statement of cash flow
are the most understandable sections in the annual report.
The user groups have a strong agreement on the usefulness of accounting
information contained in the annual report for investment decisions, and they prefer to
use it to obtain primary information for making investment decisions. This preference
is broadly consistent with that reported for developed and developing countries cited
earlier. The primary information is usually found in the income statement, cash flow
statement, balance sheet, and notes. This clearly provides substantial and favorable
evidence about the attainment of the primary objective of financial reporting in Qatar.
The results revealed that although annual reports represent the main source of
important and useful accounting information for investment decisions, user groups rely
upon other available sources of information, namely, government publications;
newspapers, magazines and journals; and advice from investment services. The user
groups in Qatar are most interested in the information published by the government
probably because of the general concern about the reliability of such information. They
also rely upon the newspapers, magazines and journals probably due to its topical data.
This result is consistent with those reported for developed countries, but it contradicts
with that reported for developing countries. However, the most important reasons given
by user groups for employing sources other than an annual report were that these
sources contain new information, are more useful and are easier to get information from.
User groups differed significantly in their perception about the importance of the
cash flow section, the using of accounting information for monitoring investment
decisions, and the using of other available sources of information as they contain new
information.
The results of this study may shed lights on the need for researching the impact of
culture and attitudes of investors in Qatar on their perceptions concerning corporate
annual reports. The results may also indicate that accounting association bodies in
Qatar need to play a role in improving the awareness about the importance of corporate Corporate annual
annual reports in making investment decisions. reports in Qatar
Finally, the findings of this study may also indicate that there is a need for more
comprehensive studies to identify the similarities and differences in the perception of
investors in the GCC countries concerning the corporate annual reports. That would
help in the determination of the findings specific to Qatar and in the formation of an
overall view about the GCC countries. 323
Notes
1. These international accounting firms dominate the market in Qatar.
2. This law was issued with 329 separate articles, and it describes the structure of different
legal forms of companies.
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Corresponding author
Jalal M. Alattar can be contacted at: al-khater@qu.edu.qa

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