Colour as visual rhetoric in financial reporting

John K. Courtis

Accounting Forum, 2004, vol. 28, issue 3, 265-281

Abstract: Visual rhetoric within communication seeks to persuade through the use of picturing and encompasses words and colour. Visual rhetoric is present within annual reports. The specific role of colour in financial reporting is a neglected field of enquiry. A survey of 100 Hong Kong annual reports related colour usage to profitability change and found companies used more colour when profitability both increased and decreased. The eight most popular colours published in reports were identified and an experiment used them to proxy a pervasive form of visual rhetoric. Results show that some colours are associated with more (less) favourable perception formation and with more (less) investment allocations. Gender differences also were examined with some positive results. However, the story is not about identifying and advocating any specific colour associations for annual report usage or avoidance. The focus is about whether colour can influence perception formation and investment judgments. The evidence suggests that colour may not possess neutral effects in annual report communication. If replication studies with larger samples and in different cultural settings can corroborate this as a phenomenon then the implications may be far-reaching for annual report preparers, auditors and users.

Date: 2004
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Citations: View citations in EconPapers (14)

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DOI: 10.1016/j.accfor.2004.07.003

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