Communicating financial information to a non financial audience
Download
1 / 31

Communicating Financial Information to a Non-Financial Audience - PowerPoint PPT Presentation


  • 184 Views
  • Uploaded on

Communicating Financial Information to a Non-Financial Audience. IABC International Conference June 27, 2005 Washington, D.C. James D. Cole, CPA Email questions to [email protected]

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Communicating Financial Information to a Non-Financial Audience' - cleo


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Communicating financial information to a non financial audience l.jpg

Communicating Financial Information to a Non-Financial Audience

IABC International Conference

June 27, 2005

Washington, D.C.

James D. Cole, CPA

Email questions to [email protected]

Disclaimer: This presentation is made in support of the educational efforts of the participants and should not be deemed to represent professional advice of a legal, accounting or investment nature. The application of these concepts as presented is necessarily dependent on the circumstances of each situation and would therefore require appropriate consultation with professional service providers before implementation.


Communicating financial information to a non financial audience2 l.jpg
Communicating Financial Information to a Non-Financial Audience

GOAL

……Learn what does and does not need to be said and how to “walk through” critical information with non-financial audiences. Also learn how to obtain better information from accountants and financial experts to improve YOUR communication efforts.


Objectives and highlights l.jpg
Objectives and Highlights Audience

  • Sifting the chaff-- what does and does not need to be communicated

  • Lighting the path—relating to your audience

  • Pointing out the potholes—emphasize the critical data

  • Walking together—establishing ongoing communication helpful to all


Who cares l.jpg
Who Cares? Audience

Poor financial communication examples

  • Enron ( i.e.—Where did Arthur Anderson go?)

  • Worldcom (see above)

  • Internet stock “bubble”

  • NBA (National Benevolent Association)The organization operates more than 90 nursing homes, senior facilities and children’s homes nationwide. $369M in assets, $293M of liabilities, now in Chapter 11


Who cares5 l.jpg
Who Cares? Audience

Integral role in financial communication

  • Both internal and external communications

  • Departmental budgets

  • Investor/constituent relations


Background of communication l.jpg
Background of communication Audience

Internet definitions of communication

  • The activity of communicating; the activity of conveying information; “they could not act without official communication from Moscow”

    www.cogsci.princeton.edu/cgi-bin/webwn


Background of communication7 l.jpg
Background of communication Audience

  • A connection allowing access between persons or places; “a secret passageway provided communication between the two rooms”

    www.cogsci.princeton.edu/cgi-bin/webwn


Background of communication8 l.jpg
Background of Communication Audience

The act of transmitting verbal and non-verbal information and understanding between seller and buyer.

www.ncn-ltd.co.uk/sellingtaster/misc/glossary.htm


Instructor definition of communication l.jpg
Instructor Definition of Communication Audience

“the transfer of an idea, concept, data or other information from one person to another”


Instructor definition of noise l.jpg
Instructor Definition of NOISE Audience

“Unwanted sound, or the FAILURE to successfully transfer an idea, concept, data or other information from one person to another”


Communication and noise common attributes l.jpg
Communication and Noise – Common Attributes Audience

Both can result in action

  • Decision to proceed with true information

  • Decision to proceed with inaccurate information

  • Decision to NOT listen


Intent of financial communication l.jpg
Intent of Financial Communication Audience

  • Report card of activity and status

  • Provide credibility

  • Stimulate thought or action


Problems from the beginning l.jpg
Problems from the Beginning Audience

  • Poor preparation by communicator

    • What is SPECIFIC intent?

      • Varies from type of data (i.e. audit versus budget)

    • Communicator lacks information

      • Background of data

      • Goal of audience


What about the experts l.jpg
What About the Experts? Audience

Role of CPA

Per Virginia Society of CPA’s website, “One advantage of working with CPAs is that they speak your language” …..” they are adept at untangling financial as well as non-financial puzzles and illustrating the total picture with clarity and objectivity” ….


Communicating with the experts l.jpg
Communicating with the Experts Audience

  • Ask questions your audience will likely ask of you

  • Define terms in common language

  • Determine your communication goals


Poor preparation by recipient audience l.jpg
Poor Preparation by Recipient (audience) Audience

Homework

  • Data supplied by communicator

    Knowledge base

  • Lack of training/experience


Environment for delivery not conducive l.jpg
Environment for Delivery not Conducive Audience

  • Time and place for every communication

  • Distractions (i.e. audit report at end of long agenda)


Communication planning l.jpg
Communication Planning Audience

  • Thorough knowledge of raw information

  • Understand audience

  • Agree on motive, approaches

  • Provide material ahead of presentations


Biggest issue in communicating l.jpg
Biggest Issue in Communicating Audience

  • Every audience starts at one place

    • WHY should I listen?

      • Does it affect me?

      • Does it affect someone I know?


Critical concept l.jpg
CRITICAL CONCEPT Audience

  • RELATE to the audience

    • Sales people want SALES data

    • Cash managers want cash, not accruals

    • Stockholders want EPS, etc.

    • Executives—BIGGER picture and bottom line

    • The public – WHY do I need to know?


Pitfalls l.jpg
Pitfalls Audience

  • Acronyms –FASB, GASB, RevProc, etc.

  • Technical complexities

  • Skipping footnotes or appendices

  • Small font

  • Endless lists of data

  • Pennies in reports


More pitfalls l.jpg
MORE Pitfalls Audience

  • Using accounting to explain accounting

  • Failing to explain relevance

  • Overuse or improper use of technical terms


Better mousetraps l.jpg
Better mousetraps Audience

  • Charts, graphs

  • Overviews, even for audited reports

  • Plain language

  • Use examples audience can relate to

    Refer to products (sales of cars, etc.)

    Use the terminology of your audience


Explain some terms l.jpg
Explain Some Terms Audience

  • Depreciation

  • Deferred Taxes

  • Deferred Revenue

  • Budget Variance

  • Extraordinary items


Audience examples l.jpg
Audience Examples Audience

  • Biggest complaint from audience

  • Worst experience from audience

  • Best tip from audience


Objectives and highlights again l.jpg
Objectives and Highlights-AGAIN Audience

  • Sifting the chaff-- what does and does not need to be communicated

  • Lighting the path—relating to your audience

  • Pointing out the potholes—emphasize the critical data

  • Walking together—establishing ongoing communication helpful to all


Slide31 l.jpg

  • Websites for reference Audience

  • http://www72.homepage.villanova.edu/susan.stiner/cgu/2003Files/comm03.htm

  • http://www.wolfkeens.com/BIGPICTURE/pages/wp10.html

  • http://www.ibm.com/investor/financialguide/

  • http://www.onlinewbc.gov/docs/finance/fs_intro.html

  • http://www.kodak.com/US/en/corp/annualReport03/index.shtml


ad