The SEC accomplishes its mission by ensuring that companies that offer securities to the public provide honest information about their companies, the risk involved in the investment, and the securities that should be sold. It also ensures that the people or businesses that trade and sell securities, exchanges, brokers, and dealers, treat all the potential investors honestly and equitably. Some of the basic factors that should be considered while presenting the information include the target audience, purpose, message, and theme ( Johnson, Khurana, & Reynolds, 2002) . Some of the problems encountered when the users are diversified is the language barrier. Some of the users may not understand the language and may require a translator. Moreover, a lot of time may be lost in translation. The other issue is overcoming insider pressure and politics.
Other information in the annual report, is the CEO's report regarding the performance. It is important to explain the overall state of the company. The other type of information is goodwill. It focuses on highlighting the foundation or organization priority while encouraging the involvement of all stakeholders. A well-defined corporate strategy encourages investment especially if it provides positive news. Positive financial results translate to higher stock value and shareholder investment ( Johnson, Khurana, & Reynolds, 2002) . It also maintains the company reputation because it provides an opportunity to exhibit successes and decisions. A positive annual report is vital in sustaining the organization's reputation. The disadvantages are that it showcases the strengths and weaknesses of the company to competitors. Furthermore, it is binding to the management to fulfill the promises or goals in the document.
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The annual report provides the shareholders with operating and financial information such as cash flow statement, earnings, and balance sheet among other vital information. It also allows the creditors to evaluate the organization’s potential to repay loans and their financial solvency. Employees can compare the benefits with other potential employers. The report gives customers access to the current and previous performance of the company, management performance, and trends. The report offers financial analysts with a base to begin the evaluation and audit of the company's financials. Some of the factors affecting the type of information offered to the public is confidentiality ( Johnson, Khurana, & Reynolds, 2002) . For instance, most companies do not explain their competitive edge because competitors will take advantage of it. The other factor is the impact of the information. Companies rarely communicate factors that may cause loss of investor confidence such as internal politics.
Johnson, V. E., Khurana, I. K., & Reynolds, J. K. (2002). Audit ‐ firm tenure and the quality of financial reports. Contemporary accounting research , 19 (4), 637-660.