Impression management: graphical representation in integrated reports of state-owned entities in South Africa.
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Date
2021
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Abstract
Graphical representation in the integrated report is a form of voluntary disclosure, by nature
may be subject to bias or distortion by the managers of the preparing entities to yield favourable
information or reduce the gravity of the financial information to the stakeholders. This situation
prevails when limited evidence exists on how graphical representation may misrepresent the
information in many ways, such as the types of graphs selected, the frequency of graphs
presented, the quality of graphs presented, and how graphs are measured. Presenting the
evidence in respect of these ways, analysing the patterns, frequencies, selectivity, quality, and
distortion might alert stakeholders to pay attention to this information when reading these
reports. The magnitude of maladministration and corruption in South Africa indicates that
impression management (favourable bias) may hide the corruption or be perceived as
performing well. The study addresses the usage of graphical representation in integrated reports
of state-owned entities (SOEs) in South Africa and determines whether impression
management is present. The quantitative research methodology was applied in undertaking this
research study due to the objectivity of the method, following the descriptive type of research
design. The positivist research paradigm was followed, with its primary focus to determine the
genuine truth through a scientific method and objectivity. The study focused on the five years
from 2017 to 2021 for entities listed in Schedule 2 (21 entities) of the Public Finance
Management Act (PFMA). Only 15 of the 21 entities had integrated reports for the period 2017
to 2020, and only six of the 15 had integrated reports in 2021. Therefore, these 15 SOEs were
selected as the sample with a limitation of nine SOEs’ integrated reports not published in 2021.
Using statistics, a trend analysis strategy was adopted to analyse and present the results. The
findings are presented as graphs – with percentages, absolute numbers, and averages. The study
found that all SOEs use graphs, selectivity is present. Other graph type is the most common
graph used by SOEs, followed by Column graphs. SOEs are more likely to report on favourable
information than unfavourable. Graph distortion was present in 75.8% of graphs. It is
recommended that guidelines and standards of good graphs are adhered to, and entities to report
on relevant and key information to the users of the integrated reports and not following a
positive trend bias.
Description
Masters Degree. University of KwaZulu-Natal, Durban.