In both active skills, (writing and speaking) the speech type is valuable because it shows reference to the real speaker, esp., in narratives. The Direct speech refers to the unaltered words of a person reported by another while the Indirect/Reported speech is the reported voice of a person (1st person).
Although both speech types can be identified through structure, yet there are few rules to consider while writing any of them or using it in a speech. For clear understanding of these, we shall take them one by one.
Direct Speech
As stated above, it is the direct and unaltered words of a person reported by another. Ex.: Kate said: "I prefer chicken burrito to mince pie". Someone is reporting what Kate said in the above expression using the direct speech, that is, exact words said by Kate. Rules:> A comma/colon must be employed to mark off the reporter's voice from the direct speech. I.e. Kate said, ... If you look at after the word "SAID" which is the reporter's voice, you will notice a comma. However that comma could be a colon(:) either.
> The direct words of the true speaker are quoted. I.e. ..."I prefer chicken burrito to mince pie".
> Words quoted have to be the exact words of the original speaker. Once paraphrased, they shouldn't be quoted.
Since you have understood the scope of the direct speech, it's demanded that you advance to the second type and make your knowledge about the speeches well-rounded. There are rules guiding this too; they are therefore unfolded below.
Indirect Speech
This form of speech is totally reportive in nature, hence its alternative name, "Reported Statement". Ex.: Kate said (that) she preferred chicken burrito to mince pie. Studying the above example closely, one realises that the present tensed prefer in the direct speech is now past. Secondly, there is no marking off by a comma or colon. Also, that may be used after "SAID" if the writer/ speaker wishes. Study the rules and get yourself intimated with the indirect speech. This structure, however, could be more demanding but you can derive the best out of the following explanation if read diligently. The rules are:> Marking off the reporter's voice by a comma or colon is excluded.
> Present tense in a direct speech changes to past tense while the future tense changes to future in the past.
Examples:
1. "I will see you on the beach", said Emmanuel. (Direct)
1b. Emmanuel said (that) I would see you on the beach. Notice the future tense WILL changes to future in the past WOULD.
2. Michel said: "I want a fan".
2b. Michel said he wanted a fan.
3. "The world is spherical", stated my teacher.
3b. My teacher said the world is spherical.
In example 3 above, you would notice the present tense does not change to past. You must know that almost in every aspect of the English grammar will you find exemption(s). Example 3 therefore contains an exemption of a kind. The case is that when the speech is about nature or universally accepted claim, the tense remains in its original form. In the case of example 3, a teacher claimed, stated or said that the world is spherical. The verb IS in this direct speech is supposed to change to WAS in the Indirect but it does not change because the speech is about nature, scientific claim which is universally accepted. Therefore there can be no change in the tense used because there is no instance or stated time that the world is said to change its shape from being spherical to rectangular.
In the light of this, the direct speech and indirect speech, we believe have been adequately elucidated and expatiated. You can get a grammar text and try questions (if available in it) on the speech forms.