Investment decisions by users of annual financial reports Investment decisions by users of annual financial reports

Abstract

The study focuses on the use of annual financial report information as a basis for investment decisions by individual educated investors in Ghana. This is informed by the assumption inherent in financial reporting standards that investors allocate funds to portfolio firms based on information from the annual reports. It is a descriptive study which uses legitimacy and agency theories as the theoretical foundation. The study concludes that individual investors in Ghana do not use information from annual reports for their investment decision making. They depend instead on media adverts on the companies and daily stock price movements.