A method is required for assessing the decision usefulness of management disclosures; this has implications for both the formulation of accounting policies and the regulation of financial disclosure. Currently massive sums of money are devoted to voluntary disclosures, without their being any clear indication of matching benefits accruing to either stakeholders (as users of the disclosures) or enterprises (as producers). We have theories, e.g. agency theory, and signalling theory (Ross, 1979), to provide motivation for voluntary disclosures, but precious little convincing empirical evidence either for their relevance or their implications. Yet the area of corporate financial communications remains vastly under-researched, a concern which is addressed in this special issue of the journal.

The number of researchers worldwide actively addressing accounting communication issues is an exclusive club, so that we are fortunate in this issue to include contributions from five of those right at the cutting edge of research in the area: Vivien Beattie, Mike Jones, John Courtis, Pauline Weetman, and myself. The papers themselves address a number of communication aspects, which might be classified as being focused on ‘content’ or ‘presentation’ issues, though there is some overlap. A joint consideration of each of the areas generates, as we shall see, an interesting research agenda. This issue explores disclosure indices, to measure information quantity, content analysis methods, to measure quality of information and the emphasis on particular themes, and alternative measures of the quality of presentation.

The issue of subjectivity in the development of disclosure indices is one that impacts significantly on the development of generalisable measures of levels of disclosure (e.g. the index constructed by Botosan, 1997). Healy and Palepu (2001) discuss the problems associated with self-constructed indices, and Beattie, McInnes and Fearnley take the discussion further, while offering practical solutions. They focus on the corporate report and are concerned with both the quantity and quality of disclosure. They recognise the measurement problems inherent in both, but adopt a systematic process for developing a new ‘disclosure quality’ index. For the first time they adopt a ‘whole of report’ perspective rather than the ‘chairman’s statement’ focus which is more typical of the field. The paper highlights the alternative sources of corporate disclosure (e.g. announcements, news items, analyst briefings, conference calls, company websites) and leads in nicely to the Jones and Xiao study which is devoted specifically to a consideration of the internet as a vehicle for corporate disclosure. A futuristic piece, this paper adds welcome clarity and realism to the roles we might expect the internet to play in future financial decision-making. The presentation aspects of the issue address, respectively, graphics, colour and language in an exploratory manner. The theory driving differences in disclosure in these areas is still limited and hindering empirical progress. Studies which provide an analytical framework and/or provisional empirical findings are therefore most welcome. So and Smith, in an empirical piece, build on the work of Beattie and Jones (1992), with graphs, and of Smith and Taffler (1996), with schematic faces, to conduct an elaborate comparative experiment to compare the relative advantages (particularly accuracy, processing time and decision confidence) of alternative presentational forms. The outcomes are interesting, often surprising, and of direct relevance to the producers of financial reports; they again raise the issue of potential conflict between the messages conveyed by the corporate report, with the potential for dysfunctional outcomes.

The absence of an adequate ‘theory of colour’ is apparent in the scope of the existing empirical work in the area (which is necessarily restricted to a comparison of monochrome and colour in general, rather than aspects of particular colours). The Courtis paper makes a significant contribution in this respect by drawing on literatures from a number of disciplines to provide the basis of an analytical framework. We might anticipate further developments in this area, from the design and philosophical areas, to operationalise the concepts further.

Leventis and Weetman examine the interesting concept of dual language reporting, the incidence of which we might expect to see grow with the expansion of the European Union. They examine differences of both content and presentation in the two sides of ‘dual’ reports, with interesting observations, particularly on the potential motivation of those doing the reporting.

We might expect that future research will more widely examine the discretionary disclosures made by firms, and associated media reports, to explore their impact on decision-makers and on investment analysts’ stock recommendations. Most of the research in the area has focused on the corporate report, but that will change. We might anticipate, for example, interest in the use of colour and graphics (and potentially sound) to convey financial messages through the internet; and also in differences (of both content and presentation) between hardcopy disclosures and those on the internet.