Financial accounting information presented with infographics: does it improve financial reporting understandability?. Issue 6 (18th October 2022)

• Record Type: Journal Article
• Authors: Cohen, Sandra; Manes Rossi, Francesca; Mamakou, Xenia; Brusca, Isabel
• Is Part Of: Journal of public budgeting, accounting & financial management. Volume 34:Issue 6(2022)
• Page Start: 263
• Page End: 295
• Publication Date: 2022-10-18
• Subjects: Accounting understandability -- Citizens' needs -- Governmental financial reporting -- Infographics; Finance, Public -- Periodicals; Finance, Public -- Accounting -- Periodicals; Budget -- Periodicals; Budget; Finance, Public; Finance, Public -- Accounting; Periodicals; 336
• DOI: 10.1108/JPBAFM-11-2021-0163
• Languages: English
• ISSNs: 1096-3367

Abstract

Abstract : Purpose: Governmental financial reporting is prepared for accountability and decision-making purposes and is directed to a wide range of users, including citizens. However, this may sound easier than it actually is as citizens without specific accounting knowledge may find it difficult to understand the financial information prepared by governments. The study analyzes citizens' perceptions toward infographics as well as their ability to improve accounting understandability by nonaccounting experts compared to the traditional financial statements. Design/methodology/approach: The paper presents the results of an exploratory analysis conducted with the participation of a group of citizens in three European countries through a questionnaire. Findings: The results show that infographics improve accounting understandability by nonaccounting experts compared to the traditional financial statements. However, infographics alone are not enough to succeed in making nonaccounting literate citizens experts in fully understanding accounting information. Originality/value: The novelty of the research consists in its ability to give voice to citizens' preferences regarding the way the financial information is presented, which has been largely neglected by previous studies. In parallel, it analyzes the effect of accounting knowledge on accounting understandability. Moreover, it is the first study that analyzes the use of infographics in public sector financial reporting.