Academic literature on the topic 'Annual report readability'
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Journal articles on the topic "Annual report readability"
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Bradley, Wray, and Li Sun. "Proximity to broad bond rating change and annual report readability." Asian Review of Accounting 29, no. 2 (February 11, 2021): 227–50. http://dx.doi.org/10.1108/ara-06-2020-0096.
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PurposeThe purpose of this study is to examine the impact of proximity to broad bond rating change on annual report reading difficulty.Design/methodology/approachWe use regression analysis to examine the association between proximity to broad bond rating change and reading difficulty of annual report.FindingsUsing a large panel sample with 11,767 firm-year observations representing 1,474 unique US companies from 1994 to 2016, we find a significant positive relation between proximity to broad bond rating change and annual report reading difficulty, which suggests that the annual reports of borderline firms are difficult for stakeholders to read and understand.Originality/valueBy investigating whether and how borderline firms manipulate readability of annual reports, our study contributes to bond rating research in finance literature and disclosure quality research in accounting literature. To the best of our knowledge, this study is perhaps the first empirical study that directly tests the link between proximity to broad bond rating change and annual report readability. In particular, the majority of prior studies concentrate on the economic consequences of annual report readability, but few studies investigate the determinants of readability. Therefore, examining the impact of proximity to broad bond rating change on readability contributes to a more comprehensive understanding of annual report readability.
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Xu, Hongkang, Trung H. Pham, and Mai Dao. "Annual report readability and trade credit." Review of Accounting and Finance 19, no. 3 (July 17, 2020): 363–85. http://dx.doi.org/10.1108/raf-10-2019-0221.
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Purpose The purpose of this study is to examine the influence of the readability of annual reports on firms’ ability to obtain trade credit from suppliers. Particularly, the authors conjecture that annual report readability helps firms obtain more trade credit from suppliers. Design/methodology/approach The authors use the Gunning Fog Index as the primary measure of annual report readability and the ratio of accounts payable to the book value of total assets as the measure of trade credit. Findings Results from the study of 4,754 firms during the 2004–2016 period indicate that suppliers extend more trade credit to firms with more readable financial reports. The authors’ results are robust to alternative measures of trade credit and annual report readability. The authors’ results remain robust when we control for firm fixed effects and potential endogeneity problems using the instrumental variable approach. A further test shows that the level of trade credit is higher for firms in business service industries, and that this relation is weakened when firms disclose less readable 10-K filings. Originality/value The authors’ findings provide new insight into the role of financial report readability in firms’ ability to obtain trade financing from suppliers. The authors’ results are also in line with the SEC’s encouragement that firms use plain English and easy language in financial reporting.
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Liu, Ming, and Zhefeng Liu. "Does annual report readability explain the accrual anomaly?" Asian Review of Accounting 29, no. 3 (May 28, 2021): 307–31. http://dx.doi.org/10.1108/ara-07-2020-0114.
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PurposeThe purpose of the study is to investigate the possible role of annual report readability in accrual anomaly, shedding light on why investors fail to incorporate accruals information in a timely and unbiased manner beyond the original naive investor fixation explanation.Design/methodology/approachUsing five proxies of annual report readability and available data over 1993–2017, we investigate whether accrual overpricing is more severe when annual reports are less readable.FindingsWe find little (substantive) evidence of accrual overpricing among high (low) readability firms. The readability effects are contingent on the level of business complexity and earnings management.Research limitations/implicationsThis study extends the original naive investor fixation explanation and documents annual report complexity as a market friction in explaining the accrual anomaly, contributing to the mispricing vs risk debate and supporting the efficient market hypothesis.Practical implicationsLow readability of annual reports is a red flag to investors.Social implicationsThis study provides support for regulatory initiatives aimed at enhancing readability of corporate disclosures to address market frictions and improve market efficiency.Originality/valueAccrual anomaly has posed a challenge to the efficient market hypothesis. This study draws on and adds to the line of research indicating that annual report complexity is a friction erecting a barrier to transparency, hindering market efficiency. This study contributes to our understanding of the enigmatic accrual anomaly.
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Dalwai, Tamanna, Gopalakrishnan Chinnasamy, and Syeeda Shafiya Mohammadi. "Annual report readability, agency costs, firm performance: an investigation of Oman's financial sector." Journal of Accounting in Emerging Economies 11, no. 2 (February 2, 2021): 247–77. http://dx.doi.org/10.1108/jaee-06-2020-0142.
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PurposeThe readability of annual reports is an important feature that determines the quality of communication between a firm and its stakeholders. Extant literature has demonstrated that readability characteristics of annual reports are crucial in facilitating the investor's ability to process and analyze information, resulting in higher firm performance and lower agency costs. This study examines the relationship between annual report readability, agency costs and the firm performance of listed financial sector companies in Oman.Design/methodology/approachUsing a sample of 150 firm-year observations of listed financial sector companies on the Muscat Securities Market (MSM) over the period 2014 to 2018, a panel regression analysis is used, along with the system generalized method of moments (GMM) estimation to address endogeneity concerns. The readability of annual reports is proxied by the length of the annual report, the Flesch reading ease and the Flesch–Kincaid index.FindingsThe ordinary least squares (OLS) results suggest that readability proxied by the length of the annual report has no significant relationship with agency cost, return on assets (ROA) or stock returns. The OLS results are confirmed through the system GMM estimation model for agency costs, Tobin's Q and stock returns. Easier-to-read annual reports measured by the Flesch reading ease demonstrate high asset utilization ratio and Tobin's Q. These results emphasize Flesch reading ease measure in explaining the economic significance of agency cost and Tobin's Q. In contrast, difficult-to-read annual reports are observed for firms with high ROA.Research limitations/implicationsThe study is limited to the financial sector. Its generalizability could be extended to a similar sector or countries with features similar to Oman. Future studies on readability could be extended to other sectors of Oman, and financial firms with easier-to-read annual reports show a high Tobin's Q, which reflects the confidence of investors in the stock market. These findings may encourage policymakers to regulate the readability features of annual reports and influence the reporting quality of financials and disclosures also including cross-country comparisons.Practical implicationsFinancial firms with easier-to-read annual reports show a high Tobin's Q, which reflects the confidence of investors in the stock market. These findings may encourage policymakers to regulate the readability features of annual reports and influence the reporting quality of financials and disclosures.Originality/valueWhile the study extends prior literature on readability, agency costs and firm performance, it is also one of the first to examine the financial sector of an emerging country, namely, Oman. The study supports the obfuscation hypothesis through the association of readability measure with agency cost. Unlike prior research that has focused on common computational linguistic literature, this study uses three proxies for readability to assess information quality.
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Le Maux, Julien, and Nadia Smaili. "Annual Report Readability And Corporate Bankruptcy." Journal of Applied Business Research (JABR) 37, no. 3 (May 1, 2021): 73–80. http://dx.doi.org/10.19030/jabr.v37i3.10374.
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This study investigates the relationship between a firm’s annual report readability and its probability of bankruptcy. Findings show that firms with a larger 10-K file size have a higher probability of bankruptcy. More specifically, we suggest that there is a curvilinear relationship between annual report readability and bankruptcy probability. However, this relation is not significant for small firms. We further suggest that annual report readability has incremental power in predicting corporate bankruptcy. While prior accounting and finance research mainly used financial and accounting ratios as predictive variables of firm bankruptcy, we add a new non-financial predictive variable to these models.
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Gu, Shuibin, and Regina Naa Amua Dodoo. "The Impact of Firm Performance on Annual Report Readability." International Research Journal of Business Studies 14, no. 1 (July 30, 2021): 59–68. http://dx.doi.org/10.21632/irjbs.14.1.59-68.
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This paper attempts to find the impact of firm performance on annual report readability. This study consists of 15 listed firms on the Ghana Stock Exchange within the period 2008 to 2017. The study applies Gunning Fog Index to measure annual report readability and measures Firm Performance using Return on Assets (ROA) by applying the fixed and random effect method. Per the Hausman test, the random effect method was accepted; the result stated that firm performance positively relates to annual report readability. In addition, the study finds out that corporate governance exerted a negative influence on the readability of the annual report. Finally, the study adopts F-MOLS to test Robustness. Regulators can consider improving and writing plain disclosure laws to improve annual report readability.
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Arayesh, Hamidreza. "Earnings Management and Annual Report Readability." Journal of Management and Accounting Studies 5, no. 02 (August 10, 2019): 46–49. http://dx.doi.org/10.24200/jmas.vol5iss02pp38-41.
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The annual report is just one of the ways that managers could have relationship with investors. Managers have many limitations in communicating with investors, so Annual Report is a legible way to build trust, communicate and continue of this relationship. Investors and other users can benefit from a firm's profits for investment decisions and predictable cash flows and future profits correctly when the firm's profits are based on financial performance and it will be legible and clear, and not it should not be reported based on speculation management uses accounting methods. Therefore, a strong impetus of managers to falsifications and show a good image of the company may lead to unrealistic stock prices, irrelevant of accounting information and ultimately wrong decisions could be occurred. The aim of this study is to evaluate the effect on the legibility of earnings management accounting information, including earnings per share and its book value. Because the conscious actions have a negative effect on the earnings and book value per share and consequently the predictability and profit accounting were reduced and this leads to irrational decisions is invested. Methodology: This study is review, and sum of 13 similar studies topic. Google Scholar databases was using of Scientific Information Database (SID) and the Science Direct website. Researchers will investigate various effects of earnings management and accounting information in different aspects. The results of this study will be discussed below.Results: In the previous researches the only study that was similar is Lu et al. (2017) in France and called earnings management and readability annual report. Among the Previous studies it is not found the internal study which will survey earnings management and readability of the annual report.Conclusion:In this regard it is suggested, few studies will do in Iran. Because the financial statements can be cleared.
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Boubaker, Sabri, Dimitrios Gounopoulos, and Hatem Rjiba. "Annual report readability and stock liquidity." Financial Markets, Institutions & Instruments 28, no. 2 (March 5, 2019): 159–86. http://dx.doi.org/10.1111/fmii.12110.
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Habib, Ahsan, and Mostafa Monzur Hasan. "Business strategies and annual report readability." Accounting & Finance 60, no. 3 (July 11, 2018): 2513–47. http://dx.doi.org/10.1111/acfi.12380.
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Lo, Kin, Felipe Ramos, and Rafael Rogo. "Earnings management and annual report readability." Journal of Accounting and Economics 63, no. 1 (February 2017): 1–25. http://dx.doi.org/10.1016/j.jacceco.2016.09.002.
Full textDissertations / Theses on the topic "Annual report readability"
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Altass, Sultan Mohammad O. "Annual report readability and the audit function." Thesis, University of Leeds, 2016. http://etheses.whiterose.ac.uk/13501/.
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Drawing on agency theory and obfuscation hypothesis, the main focus of this thesis is on the readability of annual reports. It comprises three empirical chapters which examine the readability of annual report and the possible association with the audit function. The effect of auditing on the lexical content of annual report, is to be studied in three different, yet interrelated, auditing topics, namely, audit fees, audit firm tenure, and auditor switching. The results in the first empirical chapter which investigates the association between annual reports readability and audit fees suggests that audit fees is highly statistically associated with the readability of the annual report and this association holds after controlling for different firm specific and financial characteristics. This suggests that high levels of audit fees, measured as fees paid for statutory audit services, may partially explain the quality of the annual report. Contrary to expectations, there is little evidence that non-audit fees, measured as the fees paid for consultancy and other services, have an effect on the readability of the annual report. Nevertheless, this chapter documents a strong statistical association which indicates that total audit fees, measured as the sum of audit and non-audit fees, can capture the economic bond between auditing firms and client management and that higher levels of total audit fees have negative effects on readability. Moreover, I document strong joint relationship between the three measures of fees and firm performance affecting annual report readability and that these interactions show that audit, non-audit and total fees exhibit greater effects in poorly performing firms. The second empirical chapter which investigates the association between the readability of annual reports and audit firm tenure suggests that audit firm tenure has a statistically significant relationship with the readability of annual reports and that longer tenure has a negative relationship with readability. Moreover, I document that, on average, the effect of audit tenure is stronger when the levels of audit fees are low. Finally, the analysis shows that the relationship between audit firm tenure and readability is relatively stronger in firms with weaker solvency levels. The third empirical chapter investigates the association between the readability of annual reports and auditor switching. The analysis suggests that the relationship between annual report readability and auditor switching in general is insignificant. However, after including the interaction term of switching and performance, the regression analysis suggests that when well performing firms switch their auditor they are more likely to disclose difficult-to-read annual report. Moreover, the mitigating effects of audit fees is insignificant in altering the relationship between switching and readability. The interactive relationship between switching and tenure is highly significant which indicates that, within this context, the effect of switching on readability is negative and that this relationship becomes stronger as the tenure increases. In other words, those firms with longer audit tenure are more likely to produce difficult-to-read annual reports than short-tenured clients. Moreover, the analysis of the short-term effects of switching suggests a negative and highly significant relationship between short-term switching and readability. This indicates that switching firms discloses difficult-to-read annual reports during the three years following auditor switching. Similarly, the regression results of the association between annual report readability and auditor switching within a five-year window (long-term) come in line with expectations, the relationship is highly significant and the sign is negative. This implies that firms that switch their auditor will have difficult-to-read annual reports within five years following the switch. However, it has been documented in the analysis that the effect of switching is stronger over a five-year window than short-term (that is three years following the auditor switching), which signifies delayed switching effects on readability. In both models, the mitigating effects of firm performance and audit tenure are statistically significant. In summary, the findings of this thesis suggest that firms utilise the readability of annual report, and that such practice depends on the audit function. Regulators are urged to examine the impact of client/auditor relationship and its influence on the quality of annual report.
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Rjiba, Hatem. "Essays on the determinants and implications of annual report readability." Thesis, Paris Est, 2017. http://www.theses.fr/2017PESC0124.
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Cette thèse comprend trois essais dont l’objectif est d’étudier les déterminants et les implications de la qualité de l’information narrative des entreprises cotées. L’originalité de ce travail par rapport aux études antérieures réside dans le fait que nous nous intéressons à la dimension qualitative de l’information divulguée. Afin d’appréhender la qualité de cette information nous recourons à des techniques de traitement automatique de langage naturel qui permettent de construire des indices de lisibilité des rapports annuels.Le premier essai étudie l'effet de la complexité textuelle des rapports annuels sur la liquidité des titres. L’utilisation d’un échantillon d’entreprises françaises cotées en bourse sur la période 2002-2013 montre l’existence d’une relation positive entre le degré de lisibilité des rapports annuels et la liquidité des titres. Ces résultats suggèrent que la complexité textuelle de l’information narrative affecte les investisseurs sur le marché des actions.Le deuxième essai étudie l’effet de la lisibilité des rapports annuels sur le coût des fonds propres des entreprises. Nous menons notre étude empirique sur un échantillon d’entreprises américaines cotées en bourse sur la période 1995-2012. Les résultats montrent que les entreprises font face à un coût de financement plus élevé lorsque leurs rapports annuels sont moins lisibles, ce qui indique qu’un degré faible de lisibilité réduit la capacité des investisseurs à prévoir les performances futures de l’entreprise et leur amène par conséquence à demander un rendement de fonds propres plus élevé.Le troisième essai examine l’effet des pratiques de réduction d’impôt des entreprises sur la lisibilité de leurs divulgations financières. La littérature mobilisant la théorie d’agence montre que ces pratiques de réduction d’impôt créent un cadre permettant aux dirigeants d’extraire des bénéfices privés aux dépens des autres parties prenantes. Afin de s’assurer que leurs actions opportunistes ne soient détectées, les dirigeants réduisent la qualité de l’information divulguée, ce qui détériore l’environnent informationnel de l’entreprise en question. En utilisant un échantillon d’entreprises américaines cotées en bourse pour la période 1995-2012, nous constatons que les entreprises qui s’engagent dans des politiques de diminution d’impôt publient des rapports annuels moins lisibles et plus ambigus.Mot Clés: Information narrative; lisibilité des rapports annuels; Risque d’information ; Liquidité; Coût des fonds propres; Optimisation fiscaleThis thesis comprises three separate but interconnected essays that focus on the determinants and economic implications of corporate narrative disclosure. The first essay examines the effect of annual report textual complexity on firms’ stock liquidity. Using techniques from computational linguistics, we predict and find that less readable filings are associated with lower stock liquidity. Our study provides evidence that difficult-to-read annual reports can act as a non-trivial impediment to investors’ ability to process information into useful trading signals. The findings are robust to a battery of sensitivity tests, including endogeneity, use of alternative regression techniques, and use of alternative liquidity and readability proxies.Using a large panel of U.S. public firms, the second essay presents the first evidence highlighting the relation between annual report readability and cost of equity capital. We hypothesize that complex textual reporting deters investors’ ability to process and interpret annual reports, leading to higher information risk, and thus higher cost of equity financing. Consistent with our prediction, we find that greater textual complexity is associated with higher cost of equity capital. Our results are statistically significant and economically important. We also show that disclosure tone exerts a non-trivial bearing on the cost of equity. Our findings are robust to a battery of sensitivity checks, including use of multiple estimation methods, alternative proxies of annual report readability and cost of equity capital measures, and potential endogeneity concerns. Overall, our study contributes to the research examining the relation between disclosure quality and cost of capital.The third essay investigates the effect of firms’ tax avoidance practices on the textual properties of their annual filings. Using a large sample of U.S.-listed firms, we document a positive and statistically significant relation between corporate tax avoidance and annual report textual complexity. In addition, we show that managers of tax-avoiding firms tend to hide their avoidance behavior in more ambiguous language. Our results prove to be robust to the use of numerous alternative proxies of corporate tax avoidance and annual report readability. The findings are also robust to a number of checks, including, using additional control variables, employing alternative regression methodologies, and addressing endogeneity concerns.Keywords: Narrative disclosure; Annual report readability; Disclosure tone; Information risk Stock liquidity; Cost of equity capital; Corporate tax avoidance
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Collins, Scott. "Creating a Fog: Can Plain English Be Used to Mislead Investors?" Scholarship @ Claremont, 2012. http://scholarship.claremont.edu/cgu_etd/71.
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A recent growth in textual analysis research in the accounting and finance literature relies heavily on context to draw conclusions about the readability or sentiment of the text under study. Yet the complexity of the text used in the financial disclosure is also relevant in evaluating readability and sentiment. Experimental results in this dissertation thesis show that a change in annual report complexity is associated with a change in the probability that a subject will comprehend the information being communicated in the disclosure. Specifically, increasing the complexity of an annual report disclosure dampens the probability that a subject will understand good news disclosures and accentuates the probability that a subject will understand bad news disclosures. Experimental results in this dissertation thesis also demonstrate that a change in annual report complexity is associated with a change in the probability that a subject will be optimistic about the nature of the news being communicated in the disclosure. Specifically, an increase in the complexity of an annual report disclosure reduces the probability that a subject will be optimistic about neutral news disclosures, decreases the probability that a subject will be optimistic about good news disclosures, and increases the probability that a subject will be optimistic about bad news disclosures. Further, experimental results show that subjects utilize the Financial Statements, Management's Discussion and Analysis, and Business Data sections of the annual report more frequently than the Notes to Financial Statements section of the annual report. These results should be of interest to regulators, public corporations, and readers of annual report disclosures.
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Elvelind, Sofia, and Madelene Östlund. "Årsredovisningars läsbarhet relaterat till företagens finansiella prestationer samt styrelsesammansättning : en kvantitativ studie av svenska företags årsredovisningar." Thesis, Högskolan i Gävle, Avdelningen för ekonomi, 2016. http://urn.kb.se/resolve?urn=urn:nbn:se:hig:diva-21662.
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Syfte: Årsredovisningar är ett av de viktigaste informationsdokumenten som börsnoterade företag ger ut till sina aktieägare, läsbarheten i dessa blir således viktig. Det finns incitament för chefer inom företagen att vilja mörka sämre prestationer för egen vinning. Styrelsesammansättning kan även tänkas påverka ä̈sbarhet i finansiella dokument då kvinnor och män kommunicerar olika och oberoende styrelseledamöter antar en mer objektiv roll. Syftet med detta examensarbete är att utifrån årsredovisningars filstorlek undersöka om det finns ett samband mellan rapporternas läsbarhet och företagens lönsamhet, redovisade resultat samt andel oberoende och kvinnliga styrelseledamöter. Metod: Studien har genomförts med en kvantitativ metod. Data har samlats in genom innehållsanalys av årsredovisningar från företag listade på NASDAQ OMX Stockholm Large Cap. Analys av data har skett genom att en korrelationsmatris och två regressionsmodeller har skapats. Resultat & slutsats: En lägre andel oberoende styrelseledamöter samt en sämre lönsamhet visar tendenser till att vara förknippat med sämre läsbarhet i årsredovisningar. Redovisat resultat och andel kvinnliga styrelseledamöter visar inget samband med årsredovisningarnas läsbarhet. Studien visar däremot på samband mellan större företag och årsredovisningar med sämre läsbarhet. Förslag till fortsatt forskning: För fortsatta studier föreslås att flera börslistor inkluderas och även fler redovisningsår. Det skulle vara intressant att undersöka om liknande resultat hittas för olika börslistor och då skulle en jämförelse vara möjlig mellan börslistorna och även över tiden. Uppsatsens bidrag: Denna studie undersöker läsbarheten i svenska företags årsredovisningar vilket breddar tidigare studier som främst undersökt amerikanska företag. Examensarbetet bidrar också genom att relationer mellan årsredovisningars läsbarhet och finansiella prestationer samt styrelsesammansättning studeras ytterligare.Aim: Annual reports are one of the most important documents for information from public companies to their shareholders, readability in these documents are therefor of importance. There are incentives for managers to withhold information about poorer earnings for their own benefit. The board may also potentially affect the readability of the annual report since men and women communicate in different ways and independent board members act more objective. The aim of this final thesis is to investigate if there is a correlation between readability in annual reports based on file size and earnings, net income and proportion of independent and female board members. Method: This study was conducted by a quantitative method. Data have been collected through content analysis of annual reports from companies listed on NASDAQ OMX Stockholm Large Cap. Analysis of the data was done by a correlation matrix and two multiple regressions. Result & Conclusions: A lower proportion of independent board members and lower earnings tend to be associated with annual reports that have lower readability. Net income and proportion of female board members shows no association with readability of the annual reports. However, this study concludes that larger companies are related to annual reports that have lower readability. Suggestions for future research: For future research we suggest that more stock exchange lists are included and also more different years. It would be interesting to investigate whether similar results are found for different exchange lists and that would make a comparison possible between the exchange lists and also over time. Contribution of the thesis: This study examines the readability of annual reports issued by Swedish companies, which broadens previous studies that have primarily examined US companies. The thesis also contributes since readability in annual reports related to financial performance and board composition is further studied.
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Andersson, Malin, and Marie Norrgård. "Framvagnen, en berättelse om företaget : Läsbarhetens betydelse för berättande information." Thesis, Linköpings universitet, Företagsekonomi, 2015. http://urn.kb.se/resolve?urn=urn:nbn:se:liu:diva-119757.
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Bakgrund och problem: Företag ägnar idag betydande utrymme i sina årsredovisningar till berättande information som ska ge investeraren en helhetsbild av företaget och dess verksamhet, vilket ska öka användbarheten vid beslutsfattande. Investerare värderar den kontextuella informationen högt men anser samtidigt att den saknar aktualitet och objektivitet. Ett problem med den berättande informationen är att företagen kan framställa sina prestationer och framtidsutsikter på ett opportunistiskt sätt. Med utgångspunkt i att framvagnen består av berättande information och är en viktig del av företags årsredovisning är det av vikt att undersöka framvagnen. Läsbarheten av den berättande informationen har visats påverka icke-professionella investerare i en bedömnings- och beslutssituation, varför det är intressant att undersöka hur framvagnens läsbarhet påverkar investeringsbeslutet. Syfte: Syftet är att förstå hur framvagnen används som kommunikationskanal och förklara hur interaktionen mellan framvagnens läsbarhet och nivån på de finansiella nyheterna, positiva respektive negativa, påverkar icke-professionella investerares investeringsbeslut. Metod: Studien utgår från både en kvalitativ och en kvantitativ ansats. För att förstå hur framvagnen används som kommunikationskanal har vi genomfört semistrukturerade intervjuer, med en projektledare för årsredovisningen och två användare av framvagnen för få att deras syn på sambandet mellan framvagnen och de resterande delarna av årsredovisningen samt vikten av läsbarheten av och tilliten till framvagnen. Vi genomförde ett experiment på tredjeårsstudenter på civilekonomprogrammet vid Linköpings universitet där vi undersökte hur interaktionen mellan framvagnens läsbarhet och nivån på de finansiella nyheterna, positiva respektive negativa, påverkar icke-professionella investerares investeringsbeslut. Slutsats: Vi fann att framvagnen används för att kommunicera en berättelse om företaget men även för att sätta de finansiella rapporterna i ett tydligare sammanhang, vilket ska ge investeraren en känsla för varför den ska investera i företaget. En högre läsbarhet av framvagnen underlättar kommunikationen mellan företaget och dess investerare då samtliga investerare förstår informationen samtidigt som det undermedvetet ökar tilliten till informationen. Experimentet indikerade att läsbarheten i kombination med nivån på de finansiella nyheterna har en viss påverkan på icke-professionella investerares sannolikhet att investera och tillit till informationen. En framvagn med en högre läsbarhet som innehåller positiva finansiella nyheter torde öka icke-professionella investerares sannolikhet att investera i företaget. När framvagnen har en högre läsbarhet har de icke-professionella investerarna en större tillit till de positiva finansiella nyheterna. Har framvagnen däremot en lägre läsbarhet har de icke-professionella investerarna en större tillit till de negativa finansiella nyheterna.Background & Problem: Today, companies devote significant space in their annual reports to narrative information, which provide investors with a complete picture of the company and its operations. The narrative information enhances the documents’ decision usefulness. Investors consider the contextual information valuable even though it is lacking timeliness and objectivity. One problem with the narrative information is that companies can present their achievements and prospect in a favourable way. Because the-state-of-the-company report consists of narrative information and is a significant part of the annual report it is of importance to explore. The readability of the narrative information has been shown to influence non-professional investors’ investment decision, therefore it is of interest to explore how the readability of the-state-of-the-company report influences the investment decision. Aim: The aim is to understand how the-state-of-the-company report is used as a communication channel and to explain how the interaction between the readability of the state-of-the-company report and the level of financial news, positive or negative, influence investors’ decisions. Method: The study is based on both a qualitative and a quantitative method. We conducted semi-structured interviews to understand how the-state-of-the-company report is used as communication channel. Interviews were conducted with a project manager for the annual report and two users of the state-of-the-company report. The purpose with the interviews were to get their view of the relationship between the state-of-the-company report and the financial reporting part of the annual report, as well as the importance of the readability of and reliance on the state-of-the-company report. We have conducted an experiment on third grade business students at Linköping University to explain how the interaction between the readability of the state-of-the-company report and the level of financial news, positive or negative, influence non-professional investors’ investment decisions. Conclusion: We found that the state-of-the-company report is used to communicate a story about the company, but also to contextualize the numbers, which gives the investor a sense of why they should invest in the company. A higher readability of the-state-of-the-company report enhances the communication between the company and its investors, since all investors can comprehend the information at the same time as it subconsciously increases their reliance on the information. The experiment indicated that the readability, in combination with the level of financial news (positive or negative), has some influence on non-professional investors’ likelihood to invest and their reliance on the information. A state-of-the-company report with a higher readability consisting positive financial new should increase non-professional investors’ likelihood to invest. When the state-of-the-company report has higher readability, non-professional investors have a greater reliance on the positive financial news. If the state-of-the-company report instead has lower readability, non-professional investors have a greater reliance on the negative financial news. The readability has not the same influence on professional investors because they have a more critical perspective on the state-of-the-company report.
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Ceder, Felicia, and Olivia Ahlmén. "Årsredovisningen, ett objektivt informationsdokument eller ett marknadsföringsverktyg? : En kvantitativ studie om läsbarheten i svenska börsnoterade företags årsredovisningar." Thesis, Linköpings universitet, Företagsekonomi, 2018. http://urn.kb.se/resolve?urn=urn:nbn:se:liu:diva-148893.
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Bakgrund Årsredovisningens berättande delar utgör numera majoriteten av årsredovisningen. De berättande delarna hjälper läsaren att tolka den finansiella informationen. Därmed är läsbarheten i de berättande delarna viktig för årsredovisningens användbarhet. Tidigare studier har kommit fram till att företag medvetet försämrar årsredovisningens läsbarhet för att dölja skadlig information och därigenom vilseleda läsaren. Syfte Studiens syfte är att förklara variation i läsbarhet mellan svenska börsnoterade företags årsredovisningar. Metod Denna kvantitativa studie tar sin utgångspunkt i ett eklektiskt och deduktivt angreppssätt där både läsbarhets- och redovisningsteorier ligger till grund för hypotesutvecklingen. Studien utgår från en tvärsnittsdesign där studiens empiriska material utgörs av sekundärdata som är hämtad från företags årsredovisningar. Variation i årsredovisningars läsbarhet analyseras med multipel linjär regression. Slutsats Studiens resultat visar att det finns ett starkt positivt samband mellan lönsamhet och läsbarhet och således har mindre lönsamma företag en lägre läsbarhet i sina årsredovisningar. Resultatet påvisar även att det förekommer svaga skillnader i årsredovisningars läsbarhet mellan olika branscher. Vidare indikerar analysen att större företag skriver längre texter och därigenom mer svårläst.Introduction Nowdays the narrative parts are the majority of the annual report. The narrative parts help the reader to interpret the financial information. Thus, the readability is important for the usefulness of the annual report. Prior research has found that corporations strategically use the language as a tool to hide information and to obfuscate the reader. Purpose The purpose of this study is to explain variation in readability between Swedish listed corporations’ annual reports. Method This quantitative study is based on an eclectical and deductive approach where both theories of readability and accounting theories have formulated the hypotheses. A cross-sectional design has been used and the study's empirical data consist of secondary data, derived from annual reports. Variation in annual reports readability has been analysed by multiple linear regression. Conclusion The result shows that there is a strong positive correlation between profitability and readability, thus less profitable corporations have lower readability in their annual reports. The result also shows that there are weak differences in the annual reports' readability between different industries. Furthermore, the analysis indicates that larger companies write longer texts and thus more difficult.
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Mkwinda-Nyasulu, Betty. "The Australian corporate annual reports : some factors contributing to low readability scores /." Title page, contents and abstract only, 1994. http://web4.library.adelaide.edu.au/theses/09PH/09phm6848.pdf.
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Garner, Steve A. "A Study of Firm Location to Examine Disclosures and Governance Using a Dual Approach: Quantitative Analysis Based Upon the Sarbanes-Oxley Act of 2002 and Qualitative Analysis of the Annual Report’s Management Discussion and Analysis." Thesis, University of North Texas, 2015. https://digital.library.unt.edu/ark:/67531/metadc799474/.
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The purpose of this dissertation is to investigate the effect of U.S. firms’ geographic location, whether urban or rural, on their corporate disclosure and governance practices. An “urban” firm is one that is headquartered in a large metropolitan area; whereas, a “rural” firm is one that is headquartered some distance from any metropolitan area. Specifically, the study examines whether there are different stock market reactions to urban and rural firms around key event dates relative to the enactment of the Sarbanes-Oxley Act (SOX) on July 30, 2002. Also, the readability and linguistic style in the Management Discussion and Analysis (MD&A) section of public company’s annual reports (Form 10-K) to the Securities and Exchange Commission (SEC) are investigated to determine whether urban and rural firms communicate information differently to investors.
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Li, Wan-Ju, and 李宛儒. "Readability Analysis of Annual Report File Format." Thesis, 2017. http://ndltd.ncl.edu.tw/handle/8g62p6.
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碩士輔仁大學
會計學系碩士班
105
The authorities and the public have increased the need for disclosure of transparency. None of the research discuss the readability analysis of different filings format. Therefore, our study will explore whether format of the U.S. company’s annual reports will affect the financial report users. In our study, we use four readability measurements to discuss the effect of the 10-K file format on readability. Our results show that the standard financial statements are more difficult to understand the content. All types of financial statements need the university education level to read financial statements. In addition, retail and wholesale industry have the higher level of readability. In other words, people who read the financial reports may easily to understand the content.
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Fang, Wei-Chih, and 方韋智. "Peer Effect in Corporate Annual Report Readability." Thesis, 2017. http://ndltd.ncl.edu.tw/handle/66073273124589768751.
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碩士輔仁大學
金融與國際企業學系金融碩士班
105
This paper reference from the annual report of US listed companies, the use the readability of the report to explore the peer effect in corporate annual report readability. The result shows there is a conspicuous negative correlativity between the readability of peers report and the company's, which is when the peer company's earnings are more readable, then the company's earnings readability will be lower. It means the company has more information advantage than the peers, and disclosure of less information can brings the benefits for the managers or company, the interest is higher than investor's discounted cost because of the less information. It also implied that the peers expose more information relative reduce the company's advantage so the cost will be lower than disclosure more information that brings the premium benefits of investor. In addition, the study found when the size of the company (debt ratio) greater or the financial statements report notes the abnormal of the location will significantly enhance (weaken) the negative impact of the peers readability to the company's readability. At the last, the study also found that the negative impact of the peers’ readability to the company earnings readability would be stronger when the subprime crisis occurred.
Book chapters on the topic "Annual report readability"
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Islam, Shariful. "Corporate Governance and Readability of Annual Reports." In Global Encyclopedia of Public Administration, Public Policy, and Governance, 1163–67. Cham: Springer International Publishing, 2018. http://dx.doi.org/10.1007/978-3-319-20928-9_3342.
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Islam, Md Shariful. "Corporate Governance and Readability of Annual Reports." In Global Encyclopedia of Public Administration, Public Policy, and Governance, 1–6. Cham: Springer International Publishing, 2017. http://dx.doi.org/10.1007/978-3-319-31816-5_3342-1.
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Islam, Md Shariful. "Corporate Governance and Readability of Annual Reports." In Global Encyclopedia of Public Administration, Public Policy, and Governance, 1–6. Cham: Springer International Publishing, 2017. http://dx.doi.org/10.1007/978-3-319-31816-5_3342-2.
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Butler, Matthew, and Vlado Kešelj. "Financial Forecasting Using Character N-Gram Analysis and Readability Scores of Annual Reports." In Advances in Artificial Intelligence, 39–51. Berlin, Heidelberg: Springer Berlin Heidelberg, 2009. http://dx.doi.org/10.1007/978-3-642-01818-3_7.
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Zhao, Xin, Greg Filbeck, and Ashutosh Deshmukh. "Annual Report Readability and Share Repurchases Under a Temporary Tax Holiday." In Advances in Taxation, 73–102. Emerald Publishing Limited, 2020. http://dx.doi.org/10.1108/s1058-749720200000027003.
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"BUSINESS STRATEGY, EARNINGS MANAGEMENT, AND READABILITY OF NARRATIVE INFORMATION OF THE ANNUAL REPORT (EMPIRICAL STUDY ON INDONESIA LISTED COMPANIES)." In The International Conference on ASEAN 2019, 249–57. Sciendo, 2019. http://dx.doi.org/10.1515/9783110678666-033.
Full textConference papers on the topic "Annual report readability"
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Tarjo and Alexander Anggono. "Abusive Earnings Management and Annual Report Readability." In 4th Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2019). Paris, France: Atlantis Press, 2020. http://dx.doi.org/10.2991/aebmr.k.200305.061.
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Ratna Sari, Syafira, and Arif Darmawan. "The Effect of Firm Performance on Annual Report Readability." In The International Conference on Applied Economics and Social Science. SCITEPRESS - Science and Technology Publications, 2021. http://dx.doi.org/10.5220/0010862400003255.
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Cheng, Jinfeng, Jixin Zhao, Chang Xu, and Haocheng Gong. "Annual Report Readability and Earnings Management: Evidence from Chinese Listed Companies." In Proceedings of the 2018 4th International Conference on Social Science and Higher Education (ICSSHE 2018). Paris, France: Atlantis Press, 2018. http://dx.doi.org/10.2991/icsshe-18.2018.199.
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Chou, Pamyl, Paul Jehnley Chou, Ming-Fu Hsu, Te-Min Chang, Fu-Hsiang Chen, and Sin-Jin Lin. "Integrated Annual Report Readability and Dominance-based Rough Set Theory to Forecast Corporate's Operating Performance." In 2019 IEEE 8th Global Conference on Consumer Electronics (GCCE). IEEE, 2019. http://dx.doi.org/10.1109/gcce46687.2019.9015506.
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Handoko, Bambang Leo, and Agata Laras Permana Gita Prastiwi. "Financial Statement Fraud Detection using Analysis of Corporate Social Responsibility Disclosure and Annual Report Readability with Earnings Management as Moderating Variable." In ICMECG 2022: 2022 The 9th International Conference on Management of e-Commerce and e-Government. New York, NY, USA: ACM, 2022. http://dx.doi.org/10.1145/3549823.3549832.
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Cutland, M., J. Sims, M. Pye, C. Rourke, K. McMullan, A. Linden, and S. Jones. "G150(P) What are we saying and what is understood?: the language & readability of child protection medical reports." In Royal College of Paediatrics and Child Health, Abstracts of the Annual Conference, 13–15 March 2018, SEC, Glasgow, Children First – Ethics, Morality and Advocacy in Childhood, The Journal of the Royal College of Paediatrics and Child Health. BMJ Publishing Group Ltd and Royal College of Paediatrics and Child Health, 2018. http://dx.doi.org/10.1136/archdischild-2018-rcpch.146.
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