I have a friend with an accounting degree and a law degree whocomplained about the length and complexity of the annual reports,including those of General Electric (108 pages), Citigroup (242 pages),Warner Music Group (142 pages), Pfizer (170 pages) and Bank of America(192 pages).

He blames the Securities and Exchange Commission and theFinancial Accounting Standards Board, among others, for the extensiverequired verbiage in the annual reports.

In addition, the CEOs are sometimes verbose in the report.GE's Jeffrey Immelt's "Dear Fellow Owners" was eight pages.Management's discussion and analysis for GE was 29 pages. The company's"Notes to Financial Statements" was 44 pages.

I asked my friend, "What's your problem?" He responded, "Ican't understand why the annual reports have to be so long andconfusing to the average person."

I said, "If you, with two degrees, do not comprehend theseannual reports, how can someone with just a high school diplomaunderstand them?"

What this writer is driving at is that there should be asimple four-page brochure which can fit into the inside pocket of aman's jacket or a lady's purse.

All four pages would be headed with the company's name and "12 months ended."

* Page 1 should contain the CEO's letter. One page should suffice.

* Page 2 should contain the company's assets, i.e., currentassets, cash and equivalent, receivables, inventories, total currentassets, plant and equipment, net of depreciation, other assets, andtotal assets.

* Page 3 should contain liabilities and capital, i.e.,accounts payable, other current liabilities, long-term debt, totalliabilities, corporate stock, surplus, and total capital.

* Page 4 should contain statement of operations, gross income, costs and expenses, income before taxes, taxes, and net income.

This writer is a CPA interested in the welfare of theaccounting profession, but feels sorry for the average stockholder whoowns shares in GE and cannot absorb the 108-page document.

Reading this new mini report over and over again wouldtell a story that the voluminous annual report misses. The mini reportcould be a big improvement.

Eli Mason, CPA, is a past president of the New York StateSociety of CPAs, a past chairman of the New York State Board for PublicAccountancy, and a past vice president of the American Institute ofCPAs.

(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.

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