Annual Reports Essay Example | Topics and Well Written Essays - 750 words

Annual Reports - Essay Example Such difference may arise from content organization of the major elements of an annual report or may be due to order of arrangement of the report’s sections. In content organization, and with major focus on presentation of financial items, the financial statements may be presented in either account form or in a report form. The major difference between the two forms is in their orientation. While the report format is horizontally presented, the account format is vertically presented. The financial statements can also be communicated in exact figures or round off figures. Similarly, a report can document each item of the financial statements or group items and present their cumulative values (Nikolai, Bazley and Jones, 2009). Reports may also vary in the order of presentation of the major elements such as financial statements, â€Å"management discussion and analysis,† â€Å"report on adequacy and internal control,† among other sections (Warren and Reeve, 2006, p. 681). A review of annual reports of McDonalds and Yum Brands communicates a number of differences in the organizations’ approach to communicating their annual reports. The first major difference is in the order of presentation of the reports sections. McDonalds’ annual report begins with management’s discussion and analysis of the corporation’s performance, both financial and operational. Presentation of financial statements that is facilitated by explanatory notes follows this before reports on the organization’s internal control system and reporting (McDonalds, 2011). Yum’s report however begins by presenting the annual meeting before accounting for the organization’s activities in which it presents financial statements. The reports’ outlines therefore communicate McDonalds focus on reporting its financial performance while Yum prioritizes information regarding its planned decisions on management and human resource. Both