In the previous literature, it is actually the self-serving motivation which may help in the determination of the selective use of the graphs. The management of the companies needs to have the incentives which may be help in the representation of the performance of the companies in the best possible manner which may result in the selective financial misinterpretation. The graphs have been generally adopted and designed in such a manner that they can help in the adoption of the financial signals which may be sent to the annual report users. This may also help in the adoption and design of the financial signals to different users, to help in the enhancement of the perception of the customers and the lead the users to make the sub-optimal decisions related to the financial information. In the financial graphs selectivity may be occurring whenever there may be a favourable trend. Whenever there is an absence of the graphs, it may conceal the poor performance of the companies (Dimaggio, 1983). On the other hand, the companies use the graphs for the purpose of making the good performance more salient to the users. The overall outcome of the management of the impressions is that the information which may be covered through the graph is not completely neutral. The information may be relevant in some or the other manner. From the previous studies, it has been found that selectivity has been used for the purpose of highlighting of the financial performance variables with the help of the graphs. The financial performance indicators may generally be graphed in the annual reports of the banks with a good annual performance of the banks.
As per the positive accounting theory, it may be predicted that the different managers who are the part of some of the highly visible firms are exposed to the public scrutiny and regulator’s attention of the media. This may also deem the large increase in the performance of the company which may be salient to the annual report users as these are among the regulators. Dilia and Jarvin (2010) also found that some of the large non-financial companies which have the greater financial performance may actually be less likely to volunteer the key financial indicators of the graphs.
The different banks may operate in case of the highly regulated industry which is under the consistent and the continuous attention of the media and the regulators. Thus, the potential selectiveness or the financial performance graphs can actually be driven because of the potential costs which may be incurred by the process of drawing the attention related to the high performance.
The different financial reporting practices may not be developed completely in the vacuum because of the formal and the informal rules of the company, rather than the result of the macro social processes (Frownfelter & Fulkerson, 1998). These are also likely to reflect the underlying situations which may be impact the financial reports of the company. The different national accounting practices may also vary because of the different environmental and the cultural factors. Thus the process of the adoption of graphs and the variable graphs may also vary across the nations.