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The Accuracy and Orientation of Consumers in Their Understanding of Selected Financial Terms

Zuraidah Mohd Sanusi, and Rohaya Mohd Noor, and Suaini Othman, and Normah Omar, and Dennis Taylor, (2002) The Accuracy and Orientation of Consumers in Their Understanding of Selected Financial Terms. Malaysian Journal of Consumer and Family Economics, 5 . pp. 63-74. ISSN 1511-2802

Full text not available from this repository.

Affiliations

Universiti Teknologi MARA. Faculty of Accountancy.
Universiti Teknologi MARA. Faculty of Accountancy.
Universiti Teknologi MARA. Faculty of Accountancy.
Universiti Teknologi MARA. Faculty of Accountancy.
University of South Adelaide (Australia).

Abstract

This study examine consumers’ accuracy in understanding the meaning of selected financial terms, together with the orientations of such understanding. Evidence is provided of the denotative meaning accorded to financial terms found in corporate reports, using the instrument developed by Haried (1972, 1973) and further adapted by Chudry et. al. (2000). To ensure effectiveness in the use of financial information for consumer decisions such as the placing of a purchase order or the reasonableness of a purchase price, it is necessary that the consumers of corporate goods and services understand the intended meaning of key financial terms communicated by corporations. The research issue addressed in this study is the extent to which consumers in the general public understand the meaning of financial terms portrayed in financial statements. A survey was conducted amongst three groups: public shoppers, non-accounting students and accounting students. The results of the study suggest that there were mixed levels of understanding amongst these groups. In general, the public shoppers claimed that they understood basic financial terms such “profit” and “turnover”. There were also different result for the public group that were investors and those who were not. Being investors in shares made them more accurately informed of selected financial terms. The belief orientations of the public non-shareholder group was somewhat linked to consumerism.

Item Type:Journal
Keywords:Consumers, Financial reporting
Subjects:H Social Sciences, Economics, Sociology
ID Code:9371

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