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Emphasis on Understandability
Limitations
Utility and understandability cannot be beneficially
segregated in evaluating financial reporting. Thus, both
are included in the analysis. However, the primary objec­
tive of the analysis is the evaluation of the achievement of
communication in financial reporting. Since, by definition,
communication excludes the concept of utility, no attempt is
made to evaluate comprehensively the utility function of
financial reporting. Such an analysis is beyond the scope
of this dissertation.
Literature Survey of Communication Theory
Applications
No attempt is made to evaluate any prior research on
the attainment of communication in financial reporting that
is not based on communication theory. While such other
approaches have validity, they are outside the scope of this
dissertation.
Limitation to External Financial Reporting by
-Corporate Entities
The financial statements prepared by single pro­
prietorships and partnerships normally are not prepared for
external dissemination other than for special purposes
(e.g., credit granting). Thus, these two types of business
organization are excluded from coverage. Additional support
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