Journal articles: 'Annual report readability'

1

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.

Full text

Abstract:

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.

APA, Harvard, Vancouver, ISO, and other styles

2

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.

Full text

Abstract:

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.

APA, Harvard, Vancouver, ISO, and other styles

3

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.

Full text

Abstract:

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.

APA, Harvard, Vancouver, ISO, and other styles

4

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.

Full text

Abstract:

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.

APA, Harvard, Vancouver, ISO, and other styles

5

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.

Full text

Abstract:

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.

APA, Harvard, Vancouver, ISO, and other styles

6

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.

Full text

Abstract:

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.

APA, Harvard, Vancouver, ISO, and other styles

7

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.

Full text

Abstract:

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.

APA, Harvard, Vancouver, ISO, and other styles

8

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.

Full text

APA, Harvard, Vancouver, ISO, and other styles

9

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.

Full text

APA, Harvard, Vancouver, ISO, and other styles

10

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 text

APA, Harvard, Vancouver, ISO, and other styles

11

Thoms, Claudia, Anke Degenhart, and Katharina Wohlgemuth. "Is Bad News Difficult to Read? A Readability Analysis of Differently Connoted Passages in the Annual Reports of the 30 DAX Companies." Journal of Business and Technical Communication 34, no. 2 (December 23, 2019): 157–87. http://dx.doi.org/10.1177/1050651919892312.

Full text

Abstract:

This study examines the strategic use of readability to obfuscate negative news in a German financial communication context. Combining a manual and an automated content analysis, the authors assess the tone and readability of three parts (chairman’s address, share-price development, and development in the fiscal year) of the 2014 annual reports of the 30 companies listed in the German stock index DAX. The results indicate that positively connoted passages in annual reports are not necessarily easier to read than negatively connoted passages. Furthermore, the readability of the annual report varies depending on the part and its function within the report.

APA, Harvard, Vancouver, ISO, and other styles

12

Ong, Tze San, Boon Heng Teh, Kai Cing Seng, and Sin Huei Ng. "Does Information Overload of Annual Reports Matter?" International Journal of Financial Research 11, no. 2 (March 16, 2020): 243. http://dx.doi.org/10.5430/ijfr.v11n2p243.

Full text

Abstract:

Nowadays, information overload is an increasing concern and has become an alarming issue. Bursa Malaysia requires all PLCs to have corporate disclosures in their annual reports in order to cultivate good corporate governance. However, annual report readability issues are evident and poor annual report readability is a common occurrence in Malaysia. Thus, this paper seeks to empirically investigate the association between information overload issues, annual readability and financial performance of Malaysian PLCs. Secondary data consisting of 85 PLCs from the years 2015 to 2017 were used. The results have revealed that the information overload issues, i.e. too many disclosures for each company, negatively affect the companies’ financial performance. Firms with annual reports that are easier to read with ideal readability have better financial performance. Not only that, fewer information overload issues tend to be encountered when the annual reports have good readability levels. Future studies are suggested to include primary data as well as non-listed companies for comprehensive coverage and generalization. Policy makers are encouraged to create minimum disclosure requirements which address the information gap between informed and uniformed investors. In addition, with developments in technology, advanced smartphone applications can be developed for investors to conveniently access the financial information of companies.

APA, Harvard, Vancouver, ISO, and other styles

13

Alvenia, Shyntia, and Annisaa Rahman. "Readability Laporan Tahunan Dan Audit Delay." InFestasi 18, no. 1 (June 27, 2022): InPress. http://dx.doi.org/10.21107/infestasi.v18i1.14258.

Full text

Abstract:

The purpose of this study is to examine the effect of readability of annual reports on audit delays. The research period is 2018-2019, with a sample of 1143 companies listed on the Indonesia Stock Exchange. The readability of the annual report is measured by the size of the report file, where the larger the file size of the annual report, the lower the readability of the annual report. Audit delay is measured by the number of days of issuance of the audit report calculated from the end of the fiscal year. The results of this study indicate that readability of annual report has a negative effect on audit delays. This means that the low readability of the annual report affects audit delays. The results of this study support agency theory. There are indications of management's motivation in manipulating the annual report by reducing the readability of the report, making the auditors have to be careful in conducting audits so that they seem to experience delays in issuing audit reports.Penelitian ini bertujuan untuk menguji pengaruh keterbacaan laporan tahunan terhadap audit delay. Periode penelitian 2018-2019, dengan sampel sebanyak 1143 perusahaan yang terdaftar di Bursa Efek Indonesia. Keterbacaan laporan tahunan diukur dari ukuran file laporan, semakin besar ukuran file laporan tahunan maka semakin rendah tingkat keterbacaan laporan tahunan. Audit delay diukur dengan jumlah hari penerbitan laporan audit yang dihitung sejak akhir tahun anggaran. Hasil penelitian ini menunjukkan bahwa keterbacaan laporan tahunan berpengaruh negatif terhadap audit delay. Rendahnya keterbacaan laporan tahunan mempengaruhi audit delay. Hasil penelitian ini mendukung teori keagenan. Adanya indikasi motivasi manajemen dalam memanipulasi laporan tahunan dengan mengurangi keterbacaan laporan, membuat auditor harus berhati-hati dalam melakukan audit sehingga terkesan mengalami keterlambatan dalam mengeluarkan laporan audit.

APA, Harvard, Vancouver, ISO, and other styles

14

Rahman, Annisaa, and Rayna Kartika. "Keterbacaan Informasi Naratif Laporan Tahunan dan Cash Holdings." Jurnal Ilmiah Akuntansi 6, no. 1 (June 25, 2021): 163. http://dx.doi.org/10.23887/jia.v6i1.29886.

Full text

Abstract:

This research aims to test and analyze the effect of readability narrative information of the annual report on cash holdings. The readability is measured by the Gunning Fog Index, while cash holdings are measured by the ratio of cash to total assets. The study was conducted in the period 2015 to 2017. The population of this study is all non financial sector companies listed on the Indonesia Stock Exchange. Sampling techniques used purposive sampling and selected 712 firm-year. Data analysis uses multiple linear regressions. The results show that the readability of the company's annual report affects the companies’ cash holdings. The harder the annual report is read, the greater the amount of cash held by the company. The findings of this study are in line with precautionary and agency motives. The findings of this study briefly show support for the readability of annual reports on the company's internal financial policies.

APA, Harvard, Vancouver, ISO, and other styles

15

Fang-Klingler, Jieyan. "Impact of Readability on Corporate Bond Market." Journal of Risk and Financial Management 12, no. 4 (December 5, 2019): 184. http://dx.doi.org/10.3390/jrfm12040184.

Full text

Abstract:

This paper investigates the impact of annual report readability on the corporate bond market. My findings indicate that in the US corporate bond market, firms with less readable annual reports tend to have higher credit spreads, higher credit spread volatilities, higher transaction costs, higher transaction costs volatility, smaller trade size, higher number of trades and higher number of trades volatility. This paper also provides the first answers to the question as to whether annual report readability matters to international market participants in the corporate bond market. My findings provide evidence that in the EUR corporate bond market, firms with more readable annual reports are associated with lower credit spreads.

APA, Harvard, Vancouver, ISO, and other styles

16

Octaviani, Monicha, and Iman Harymawan. "Corporate Secretary Professional Expertise and Annual Report Readability." Journal of Accounting and Strategic Finance 5, no. 2 (December 24, 2022): 233–51. http://dx.doi.org/10.33005/jasf.v5i2.250.

Full text

Abstract:

This paper aims to examines the relationship between professional corporate secretary expertise and annual report readability of 1,476 observations from all companies listed in the Indonesia Stock Exchange from 2014-2018 using OLS Regression with STATA 15.0. The findings obtained from this research are the legal expertise possessed by the corporate secretary will make the company's financial statements easier to understand. Meanwhile, the accounting expertise of the corporate secretary has no significant effect on the annual report readability. However, the annual report readability of firms with a corporate secretary with international expertise will be more readable. For company management, the results of this study have implications for consideration to involve professional expertise, such as legal expertise and international experience, as a part of qualifications in appointing corporate secretaries to improve the quality of information disclosure. Furthermore, this paper increases the understanding of the corporate secretary’s characteristics and its effect on the company’s annual report readability as a tool to measure the quality of information disclosure to reduce problems related to asymmetric information.

APA, Harvard, Vancouver, ISO, and other styles

17

Shauki, Elvia R., and Eva Oktavini. "Earnings Management and Annual Report Readability: The Moderating Effect of Female Directors." International Journal of Financial Studies 10, no. 3 (August 28, 2022): 73. http://dx.doi.org/10.3390/ijfs10030073.

Full text

Abstract:

The purpose of this study is to examine the influence of earnings management on the readability of annual reports while also examining the moderating role of a female director. In particular, the readability of a company’s annual report will be seen from the management perspective using the FOG index on the annual reports of companies listed on the Indonesia Stock Exchange during 2015–2018 (excluding the financial sector), with a total sample of 996. This research confirms that companies that conduct earnings management can make complex company annual reports that are difficult to read as these companies tend to hide earnings management practices. Thus, the users of annual reports will find it difficult to identify these practices. This study confirms the mathematical theory of communication that annual reports are a communication tool for companies and, therefore, must be free from financial manipulation such as earnings management because this action will give a bad signal. Moreover, the moderating effect of female directors was not proven. This implies that female directors in Indonesia had not been able to moderate the readability of annual reports; one possibility might be due to the composition of female directors, which was relatively small.

APA, Harvard, Vancouver, ISO, and other styles

18

Xu, Wei, Zhenye Yao, and Donghua Chen. "Chinese annual report readability: measurement and test." China Journal of Accounting Studies 7, no. 3 (July 3, 2019): 407–37. http://dx.doi.org/10.1080/21697213.2019.1701259.

Full text

APA, Harvard, Vancouver, ISO, and other styles

19

Luo, Jin-hui, Xue Li, and Huayang Chen. "Annual report readability and corporate agency costs." China Journal of Accounting Research 11, no. 3 (September 2018): 187–212. http://dx.doi.org/10.1016/j.cjar.2018.04.001.

Full text

APA, Harvard, Vancouver, ISO, and other styles

20

Ginesti, Gianluca, Carlo Drago, Riccardo Macchioni, and Giuseppe Sannino. "Female board participation and annual report readability in firms with boardroom connections." Gender in Management: An International Journal 33, no. 4 (June 4, 2018): 296–314. http://dx.doi.org/10.1108/gm-07-2017-0079.

Full text

Abstract:

Purpose This paper aims to investigate the relationship between the female board participation and the readability of annual report. Design/methodology/approach Using hand-collected data from a “network-oriented market”, as exists in Italy, which includes 435 annual reports, this study uses a regression analysis to test whether female board participation affects the annual report readability. Findings Female board participation is found to have a positive impact on disclosure readability in firms with small boardroom connections but the opposite effect in firms with large boardroom connections. Research limitations/implications This paper responds to recent calls in the corporate governance literature by investigating whether the female board participation affects the transparency of the disclosure practices. Practical implications This study has policy implications, as it helps to improve evaluations of how, and under which circumstances, female board participation may lead to higher disclosure quality and thus benefit investors. Originality/value This paper shows that female board participation has different effects on the disclosure readability at different levels of board positions in inter-firm networks.

APA, Harvard, Vancouver, ISO, and other styles

21

Richards, Glenn, and Chris van Staden. "The readability impact of international financial reporting standards." Pacific Accounting Review 27, no. 3 (August 3, 2015): 282–303. http://dx.doi.org/10.1108/par-08-2013-0086.

Full text

Abstract:

Purpose – This paper aims to compare the readability of narrative annual report disclosure pre- and post-International Financial Reporting Standards (IFRS) adoption using a computational linguistics programme to determine if annual report disclosures have become more difficult or easier to read following the adoption of IFRS. Design/methodology/approach – This paper empirically measures narrative annual report disclosure readability pre- and post-IFRS adoption using a computational linguistics programme. In this analysis, the authors control for variables that have been identified as relevant to the understanding of financial disclosures, such as size, business volatility, financial leverage and industry. Findings – Significant relationships have been identified between IFRS adoption and reduced readability indicators using readability formulas, and also using other factors such as increased length of annual report disclosures and increased use of tables. Findings suggest that the adoption of IFRS has added complexity and resulted in reduced readability of annual report disclosures. Practical implications – Academic backing to claims of IFRS’s negative implications for financial statements and their ultimate users should encourage action on the part of standard setters and report preparers to address the negative impacts of IFRS adoption. Originality/value – This paper is the first to provide evidence that New Zealand equivalents to IFRS adoption have resulted in not only longer disclosures but also more complicated disclosures.

APA, Harvard, Vancouver, ISO, and other styles

22

Bacha, Sami, and Aymen Ajina. "CSR performance and annual report readability: evidence from France." Corporate Governance: The International Journal of Business in Society 20, no. 2 (November 4, 2019): 201–15. http://dx.doi.org/10.1108/cg-02-2019-0060.

Full text

Abstract:

Purpose This study aims to examine the relationship between the corporate social responsibility (CSR) performance and the readability of annual report. The shareholder theory suggests that CSR firms will provide more transparent disclosures because this reflects a socially and environmentally responsible behavior and a firm’s commitment to high ethical standards. In the same time, the agency theory offers an opposite view. It predicts that opportunistic managers use CSR as an entrenchment strategy and hide their maneuvers through complex textual financial disclosures. Design/methodology/approach Based on a sample of 100 listed firms on the French CACAll-shares index over the period from 2013 to 2016, the authors use a panel regression analysis and run other estimation methods (IV-2SLS) and simultaneous equation model to address the endogeneity issues. They assess the readability of annual reports using the Gunning-Fog Index and the Flesch Index derived from the computational linguistics literature. Findings The results show a significant positive relationship between CSR performance and the readability of annual report. Firms engaging in CSR practices are more likely to provide transparent disclosures with higher readability because this reflects a socially responsible behavior and a firm’s commitment to high ethical standards. This result supports the stakeholder theory and the corporate reputational view. The finding is also robust to alternative readability measurements and to endogeneity bias. Practical implications This study helps all market participants to more comprehensively evaluate the CSR performance disclosed on annual report. It encourages managers to consider CSR as a means to prevent the opacity risk through improved information quality. It also drives French authorities to better regulate the narrative disclosure of CSR firms and change the way companies design their reporting practices. Moreover, it encourages CSR rating agencies to become the dominant definition of CSR evaluation by granting more importance to the quality of disclosed information. Originality/value This study extends previous research on the potential impact of CSR on information quality measured by annual report readability in the French context. Unlike prior studies on the impact of CSR on information quality, that focus exclusively on earnings management and adopt qualitative approaches to assess the SCR score, the authors use simultaneously the Gunning–Fog Index and the Flesch Index to assess the information quality and extract the CSR score from the CSRHub database of companies’ social, environmental and governance performance.

APA, Harvard, Vancouver, ISO, and other styles

23

Kawada, Brett S., and Jeff Jundong Wang. "Annual report readability subsequent to going-concern opinions." Managerial Auditing Journal 35, no. 1 (January 6, 2019): 24–42. http://dx.doi.org/10.1108/maj-09-2018-2020.

Full text

Abstract:

Purpose This study aims to examine a firm’s disclosure properties subsequent to receiving a going-concern opinion. Design/methodology/approach A difference-in-difference research design was used to control for endogeneity issues. Annual report readability is used as a proxy for firm disclosure. Findings The results indicate a negative and significant association between issuance of a going-concern report to a firm and the firm’s readability index in the subsequent year. In other words, after receiving a going-concern opinion, a firm’s annual report exhibits increased readability. The results, when broken into subsamples of surviving and failing firms, are concentrated in the surviving firms. Research limitations/implications Prior research has shown that firms change their disclosure properties due to endogenous choices motivated by incentive or exogenous shocks. The results of this study, however, suggest that firms that receive going-concern opinions are incentivized to be more forthcoming in disclosing their financial information. Originality/value To the authors’ knowledge, this study is the first to investigate how firms’ general disclosures change subsequent to receiving a going-concern opinion.

APA, Harvard, Vancouver, ISO, and other styles

24

Ertugrul, Mine, Jin Lei, Jiaping Qiu, and Chi Wan. "Annual Report Readability, Tone Ambiguity, and the Cost of Borrowing." Journal of Financial and Quantitative Analysis 52, no. 2 (April 2017): 811–36. http://dx.doi.org/10.1017/s0022109017000187.

Full text

Abstract:

This paper investigates the impact of a firm’s annual report readability and ambiguous tone on its borrowing costs. We find that firms with larger 10-K file sizes and a higher proportion of uncertain and weak modal words in 10-Ks have stricter loan contract terms and greater future stock price crash risk. Our results suggest that the readability and tone ambiguity of a firm’s financial disclosures are related to managerial information hoarding. Shareholders of firms with less readable and more ambiguous annual reports not only suffer from less transparent information disclosure but also bear the increased cost of external financing.

APA, Harvard, Vancouver, ISO, and other styles

25

Kim, Hyeonjung, and Seungjae Lee. "Annual Report Readability and Disclosure of Preliminary Earnings." Korean Accounting Journal 31, no. 4 (August 31, 2022): 33–71. http://dx.doi.org/10.24056/kaj.2022.05.003.

Full text

APA, Harvard, Vancouver, ISO, and other styles

26

이상노. "Annual Report Readability, Firm Performance, and Earnings Management." Korea International Accounting Review ll, no. 76 (December 2017): 127–50. http://dx.doi.org/10.21073/kiar.2017..76.006.

Full text

APA, Harvard, Vancouver, ISO, and other styles

27

Nazrul, Toufiq, Adam Esplin, Kevin E. Dow, and David M. Folsom. "Religiosity at the Top and Annual Report Readability." Journal of Risk and Financial Management 15, no. 10 (October 21, 2022): 485. http://dx.doi.org/10.3390/jrfm15100485.

Full text

Abstract:

This paper examines how individual religiosity at the top level of organizations affects the quality of their disclosure practices, as measured by the readability of annual reports. Our paper extends the recent accounting and finance literature that moves away from a location-based measure to an individual-based measure for capturing the effect of religiosity. Our findings suggest that the individual religiosity of C-suite executives matters in corporate decision-making and has positive implications for the quality of corporate disclosure practices, as reflected by more readable reports. This main finding is primarily driven by the religiosity of CEOs. Additional findings also suggest that the effect of religiosity is not solely driven by the religious denomination of the majority group within a given location-based setting. Previous research using religiosity proxies based on the majority religion in the locale of firms’ headquarters may have measurement issues that disguise the effect of religiosity. This issue is particularly problematic when CEOs or other executives participate in minority religious denominations. Overall, our paper finds that CEO religiosity is an important attribute that affects the overall quality of business practice.

APA, Harvard, Vancouver, ISO, and other styles

28

Li, Feng. "Annual report readability, current earnings, and earnings persistence." Journal of Accounting and Economics 45, no. 2-3 (August 2008): 221–47. http://dx.doi.org/10.1016/j.jacceco.2008.02.003.

Full text

APA, Harvard, Vancouver, ISO, and other styles

29

Hu, Nan, Ling Liu, and Lu Zhu. "Credit default swap spreads and annual report readability." Review of Quantitative Finance and Accounting 50, no. 2 (May 12, 2017): 591–621. http://dx.doi.org/10.1007/s11156-017-0639-8.

Full text

APA, Harvard, Vancouver, ISO, and other styles

30

Rahman, Annisaa, and Ahmand Nadhirin. "THE EFFECTS OF ANNUAL REPORT READABILITY ON THE AUDIT FEES." Assets: Jurnal Akuntansi dan Pendidikan 11, no. 2 (December 28, 2022): 88. http://dx.doi.org/10.25273/jap.v11i2.10335.

Full text

Abstract:

ABSTRACTThis research aims to examine and analyze the effects of the readability of annual reports on audit fees. The research was conducted on public companies in Indonesia. Readability is measured using a document length proxy, assuming that the longer the document, the lower the report's readability. This study shows that document length positively affects audit fees or vice versa. Report readability has a negative effect on audit fees. The results of this study support the signaling theory. The report's readability can be used as a signal by the auditor in considering the audit procedures to be carried out. The less readable the company's report is, the more likely it is the possibility that the company can keep unfavorable information secret, which will impact audit procedures and costs. ABSTRAKRiset ini bertujuan menguji dan menganalisis pengaruh keterbacaan laporan tahunan terhadap biaya audit. Penelitian dilakukan pada perusahaan publik di Indonesia. Keterbacaan diukur menggunakan proksi panjang dokumen dengan asumsi semakin panjang dokumen, semakin rendah keterbacaan laporan. Penelitian ini menunjukkan panjang dokumen berpengaruh positif terhadap biaya audit, atau sebaliknya, keterbacaan laporan berpengaruh negatif terhadap biaya audit. Hasil penelitian ini mendukung teori sinyal. Keterbacaan laporan bisa dijadikan sinyal oleh auditor dalam mempertimbangkan prosedur audit yang akan dilakukan. Semakin rendah keterbacaan laporan perusahaan, semakin tinggi kemungkinan perusahaan dapat merahasiakan informasi yang tidak menguntungkan, yang pada akhirnya akan berdampak terhadap prosedur dan biaya audit.

APA, Harvard, Vancouver, ISO, and other styles

31

Shandiz, Mohsen Tavakoli, Farzaneh Nassir Zadeh, and Davood Askarany. "The Interactive Effect of Ownership Structure on the Relationship between Annual Board Report Readability and Stock Price Crash Risk." Journal of Risk and Financial Management 15, no. 6 (June 15, 2022): 268. http://dx.doi.org/10.3390/jrfm15060268.

Full text

Abstract:

This study investigates the interactive effect of ownership structure on the relationship between annual board report readability and stock price crash risk in companies listed on the Tehran Stock Exchange (TSE). The negative skewness model was used to measure the crash risk of stock prices and the Fog index was used for determining the readability of the board of directors’ report. The ownership structure is examined in institutional ownership, significant managerial ownership, and family ownership. The data of companies listed on the TSE from 2013 to 2019 have been used. The statistical method of this research is multiple regressions and, to test the research hypotheses, the data panel model and the ordinary least squares method have been employed. Overall, this study provides new evidence to explain the reporting quality and the crash risk of stock prices from the lenses of the agency theory. It further investigates the interactive effect of ownership structure on the relationship between annual board report readability and stock price crash risk. The results show a significant correlation between the readability of the board of directors’ report and the crash risk of stock prices. Furthermore, the relationship between the readability of the board report and stock price crash risk is not affected by the ownership structure, including institutional ownership, significant managerial ownership, and family ownership. It can be inferred that an ownership structure, which includes institutional shareholders, significant shareholders, and family ownership, increases the supervision of managers and their reports, so they cannot keep adverse information from being released. This will ultimately improve the readability of their reports and reduce the risk of stock price crashes.

APA, Harvard, Vancouver, ISO, and other styles

32

Hassan, Mostafa Kamal, Bassam Abu Abbas, and Samy Nathan Garas. "Readability, governance and performance: a test of the obfuscation hypothesis in Qatari listed firms." Corporate Governance: The International Journal of Business in Society 19, no. 2 (April 1, 2019): 270–98. http://dx.doi.org/10.1108/cg-05-2018-0182.

Full text

Abstract:

PurposeThis paper aims to examine the relationship between the readability of annual reports and corporate performance in Qatari listed firms while controlling for a firm’s competitive position, governance structure and specific features such as size, age and industry type.Design/methodology/approachThis study relies on both agency theory and legitimacy theory to develop testable hypotheses. It uses a sample of 126 firm-year listed companies in the Qatar Stock Exchange to test obfuscation in the annual reports through examining the association between the readability of Narrative Disclosures (NDs) and corporate profitability, financial risk and agency costs for the period from 2014-2016.FindingsThe findings show that firms with higher annual report readability are more profitable and have lower agency costs, which is an indication of the existence of “obfuscation.” Qatari firms may use narrative complexity as a disclosure strategy to enhance their image and consequently maintain their social legitimacy.Research limitations/implicationsAlthough the study findings suffer from limited global generalization, they can be generalized across Gulf Cooperation Council countries. Thus, future cross-country research is encouraged.Practical implicationsThe findings encourage Qatari policymakers to instate a policy for “Plain English” writing to make NDs easy to read by international investors.Originality/valueThis study is one of very few studies that examines the readability of annual reports in emerging market economies, i.e. Qatar. The study contributes to the paucity of research that examines English-written annual reports in non-English speaking countries.

APA, Harvard, Vancouver, ISO, and other styles

33

Rjiba, Hatem, Samir Saadi, Sabri Boubaker, and Xiaoya (Sara) Ding. "Annual report readability and the cost of equity capital." Journal of Corporate Finance 67 (April 2021): 101902. http://dx.doi.org/10.1016/j.jcorpfin.2021.101902.

Full text

APA, Harvard, Vancouver, ISO, and other styles

34

Eugene Baker, H., and Dilip D. Kare. "Relationship Between Annual Report Readability and Corporate Financial Performance." Management Research News 15, no. 1 (January 1992): 1–4. http://dx.doi.org/10.1108/eb028188.

Full text

APA, Harvard, Vancouver, ISO, and other styles

35

Courtis, John K. "Annual report readability variability: tests of the obfuscation hypothesis." Accounting, Auditing & Accountability Journal 11, no. 4 (October 1998): 459–72. http://dx.doi.org/10.1108/09513579810231457.

Full text

APA, Harvard, Vancouver, ISO, and other styles

36

Lim, Edwin KiaYang, Keryn Chalmers, and Dean Hanlon. "The influence of business strategy on annual report readability." Journal of Accounting and Public Policy 37, no. 1 (January 2018): 65–81. http://dx.doi.org/10.1016/j.jaccpubpol.2018.01.003.

Full text

APA, Harvard, Vancouver, ISO, and other styles

37

Alfayerds, Willy Dozan, and Mia Angelina Setiawan. "Pengaruh Pengungkapan Emisi Karbon dan Annual Report Readability terhadap Nilai Perusahaan." JURNAL EKSPLORASI AKUNTANSI 3, no. 2 (June 28, 2021): 349–63. http://dx.doi.org/10.24036/jea.v3i2.363.

Full text

Abstract:

The objevtive of this study is to investigate the influence of carbon emissions disclosure and annual report readability on firm value. The sampel consist of firms that listed in PROPER’s and Indonesian Stock Exchange (BEI) for the year (2016-2018). By using multiple regression analysis, the results show that carbon emissions disclosure has a positive influence on firm value, while it has no significant influence with annual report readability. This study contributes to the accounting field in maximizing the role to tackle the climate change and global warming.

APA, Harvard, Vancouver, ISO, and other styles

38

Adhariani, Desi, and Elda du Toit. "Readability of sustainability reports: evidence from Indonesia." Journal of Accounting in Emerging Economies 10, no. 4 (September 7, 2020): 621–36. http://dx.doi.org/10.1108/jaee-10-2019-0194.

Full text

Abstract:

PurposeThis study aimed at investigating the readability of sustainability reports in Indonesia. The Indonesian government, through the Financial Services Authority of Indonesia (Otoritas Jasa Keuangan [OJK]), has issued regulation POJK 51/2017 concerning the implementation of sustainable finance, which requires public companies to prepare sustainability reports—either stand-alone reports or parts of annual reports. Until 2017, only 30% of the top public companies in terms of market capitalisation issued the required report. Companies' decisions to provide the report stem from the greater visibility and access to resources that flow from additional narratives. However, the usefulness of such a report can be questioned.Design/methodology/approachWe used several linguistic techniques (Flesch Reading Ease [FRE], Flesch–Kincaid, and Gunning Fog measures) to evaluate the readability of sustainability reports. The analysis was performed using a software application called “Readability Studio 2015.”FindingsWe found the reports to have a low level of readability. This means that the information provided in the disclosures are very difficult to decipher and understand by the targeted users. Considering the similar levels of report readability in companies across industries, we observe a pattern of isomorphism in the way companies have implemented the same format and language construct in disclosing their sustainability information. They might apply the myth that complex language attracts investors or impresses others.Research limitations/implicationsThe techniques to measure readability that we use might not capture the whole dimensions of readability and understandability, especially in the non-English language.Practical implicationsThe results from this study can be used as evaluation tools for companies and regulators in preparing more intelligible and readable sustainability reports, as mandated by POJK 51/2017.Social implicationsSustainability reports act as a medium of accountability for a company's sustainable production and operations. Their usefulness for investors and other users often depends on the readability of the information.Originality/valueThe readability of sustainability reports in the context of Indonesia as an emerging market has not been comprehensively investigated in previous research. This study is among the first of its kind to support the quality enhancement of the reports.

APA, Harvard, Vancouver, ISO, and other styles

39

Tarjo, Tarjo, Alexander Anggono, Prasetyono Prasetyono, Rita Yuliana, and Eklamsia Sakti. "Association between fraudulent financial reporting, readability of annual reports, and abusive earnings management: A case of Indonesia." Investment Management and Financial Innovations 19, no. 1 (April 5, 2022): 370–78. http://dx.doi.org/10.21511/imfi.19(1).2022.29.

Full text

Abstract:

In practice, auditors sometimes have a hard time detecting false financial statements since they only look at the figures on the financial statements. Consequently, they ignore the red flags in the annual reports’ wording. This study aims to analyze how the level of readability of annual reports and abusive earnings management affects fraudulent financial reporting. A total of 240 annual reports from publicly traded industrial businesses were used. The paper used data from the Indonesia Stock Exchange (IDX) and each sampled companies’ official website. A multiple linear regression analysis was used to test the hypotheses. Falsified financial statements are the dependent variable, while annual report readability and abusive earnings management are independent variables. The Dechow F-Score is used to assess whether financial statements are false. The annual report’s readability is assessed using the Flesch Reading Ease, Length, Flesch-Kincaid, and Lasbarhets Indexes. Finally, accrual discretionary and real earnings management are used to uncover earnings management misuse. According to the findings, dishonest earnings management has a significant influence on financial statement fraud. Moreover, abusive earnings management can aid in the detection of falsified financial statements. AcknowledgmentsRector Universitas Trunojoyo Madura supported this paper under Grant Number 2285/UN46.3.1/PN/2019. Any and all views, results, conclusions, or recommendations stated in this material are solely those of the author(s) and do not necessarily reflect those of Universitas Trunojoyo Madura. The authors would like to express their gratitude to the Rector of Universitas Trunojoyo Madura for his efforts and cooperation in conducting this investigation.

APA, Harvard, Vancouver, ISO, and other styles

40

Lord, Heather L. "Annual Reports: A Literature Review (1989–2001)." Journal of Technical Writing and Communication 32, no. 4 (October 2002): 367–89. http://dx.doi.org/10.2190/28lm-3hqr-r5qm-fcau.

Full text

Abstract:

Since the collapse of Enron Corporation in November 2001, annual reports and corporate financial disclosures have been the focus of government, corporate, and public attention. This article examines the literature written about annual reports between 1989 and 2001 to identify trends in research and determine areas of future study. Articles were categorized as related to SEC regulations and guidelines, summary annual reports, online annual reports, rhetorical analysis of annual reports, readability and accessibility of annual reports, methods of conveying negative information in annual reports, effective annual report writing, use and importance of annual reports, or use of annual reports in business writing classes. Post-Enron, it is likely that the number of articles in this area will dramatically increase over the next five to ten years.

APA, Harvard, Vancouver, ISO, and other styles

41

Hernanda, Syaskiah Rizky, and Mohammad Nasih. "THE IMPACT OF COMPLEX BUSINESS STRATEGY ON ANNUAL REPORT READABILITY." Polish Journal of Management Studies 22, no. 1 (December 2020): 169–85. http://dx.doi.org/10.17512/pjms.2020.22.1.11.

Full text

APA, Harvard, Vancouver, ISO, and other styles

42

Aymen, Ajina, Ben Saad Sourour, and Msolli Badreddine. "The effect of annual report readability on financial analysts behaviour." Pressacademia 5, no. 1 (March 30, 2018): 26–37. http://dx.doi.org/10.17261/pressacademia.2018.782.

Full text

APA, Harvard, Vancouver, ISO, and other styles

43

Bloomfield, Robert. "Discussion of “Annual report readability, current earnings, and earnings persistence”." Journal of Accounting and Economics 45, no. 2-3 (August 2008): 248–52. http://dx.doi.org/10.1016/j.jacceco.2008.04.002.

Full text

APA, Harvard, Vancouver, ISO, and other styles

44

Abernathy, John L., Feng Guo, Thomas R. Kubick, and Adi Masli. "Financial Statement Footnote Readability and Corporate Audit Outcomes." AUDITING: A Journal of Practice & Theory 38, no. 2 (August 1, 2018): 1–26. http://dx.doi.org/10.2308/ajpt-52243.

Full text

Abstract:

SUMMARY We examine whether the readability of financial statement footnotes in the annual report is informative about audit engagement risk. Using various readability measures, we predict and find that firms with less readable footnotes have longer audit report lag, incur higher audit fees, and are more likely to receive a first time modified going concern opinion. We also show that readability of footnotes is associated with a higher likelihood of financial misstatements and future accounting-related litigation. Our results are robust to several measures of readability used in prior literature, as well as different specifications and design choices, revealing that financial statement footnote readability provides incremental information about audit engagement risk that affects auditor-client contracting. Data Availability: Data are obtained from public sources identified in the paper.

APA, Harvard, Vancouver, ISO, and other styles

45

Yasseen, Yaeesh, Waheeda Mohamed, and Mahdiyyah Moola-Yasseen. "use of impression management practices in the chairman’s statements in South African annual reports." Communicare: Journal for Communication Studies in Africa 38, no. 1 (October 11, 2022): 37–56. http://dx.doi.org/10.36615/jcsa.v38i1.1542.

Full text

Abstract:

Impression management is the study of how individuals present themselves to be perceivedfavourably. Using agency theory, this article investigates impression management practices,influenced by the company’s underlying performance, that may be present in the chairman’sstatements in annual or integrated reports of Johannesburg Stock Exchange listed companies inSouth Africa. This research uses content analysis and specifically focuses on the identificationand measurement of three pre-determined textual characteristics referenced in these chairman’sstatements. There is reasonable evidence to suggest that management employs impressionmanagement strategies that are dependent on the level of a company’s performance. In addition,while variability in readability was not found to be a strategy used to manage impressions, theoverall readability of the chairman’s report was found to be relatively difficult and this, in turn,may affect the ability of stakeholders to benefit from the information it contains. This study islimited to the analysis of a single section of narrative reporting (the chairman’s statement) and, assuch, does not consider any impression management practices that may be present in the restof the annual or integrated report as well as in other communications between stakeholders andthe company in question. It is anticipated that the results will be of importance to professionalaccountancy bodies, users and preparers considering the negative perception of the accountingprofession owing to recent scandals. This is also one of the first studies to explore the use ofimpression management practices in South Africa and the linguistic variation employed inmanagement commentary within a South African context, thereby contributing to the readabilityof the chairman’s statements.

APA, Harvard, Vancouver, ISO, and other styles

46

Soesanto, Stefan, and Hendra Wijaya. "The Effect of Readability of Annual Reports and Value Relevance of Financial Information on Agency Costs with Analyst Coverage as Moderating Variable." Jurnal Akuntansi dan Keuangan 24, no. 1 (August 23, 2022): 46–56. http://dx.doi.org/10.9744/jak.24.1.46-56.

Full text

Abstract:

This study aims to determine the effect of readability based on the length of the annual report and the value relevance of the financial information on agency costs. The sample used in this study were 263 firm-year from Kompas100 index. Data were analyzed using multiple linear regression method. The result of this study indicate that the higher the number of pages, words and characters, which reflects the poor readability of the annual report, has a negative effect on the asset turnover ratio, which is an inverse proxy for agency costs. Furthermore, the presence of the analyst coverage variable is able to moderate the positive effect between the number of pages, words and characters in the annual report on the asset turnover ratio. However, no significant effect was found during both test between value relevance to asset turnover ratio and that are moderated by analyst coverage.

APA, Harvard, Vancouver, ISO, and other styles

47

Courtis, J. K. "An Investigation into Annual Report Readability and Corporate Risk-Return Relationships." Accounting and Business Research 16, no. 64 (September 1986): 285–94. http://dx.doi.org/10.1080/00014788.1986.9729329.

Full text

APA, Harvard, Vancouver, ISO, and other styles

48

Ajina, Aymen, Mhamed Laouiti, and Badreddine Msolli. "Guiding through the Fog: Does annual report readability reveal earnings management?" Research in International Business and Finance 38 (September 2016): 509–16. http://dx.doi.org/10.1016/j.ribaf.2016.07.021.

Full text

APA, Harvard, Vancouver, ISO, and other styles

49

Ezat, Amr Nazieh. "The impact of earnings quality on the association between readability and cost of capital." Journal of Accounting in Emerging Economies 9, no. 3 (August 12, 2019): 366–85. http://dx.doi.org/10.1108/jaee-12-2018-0136.

Full text

Abstract:

PurposeThe purpose of this paper is to explore the relationship between disclosure quality, measured by the readability of the board of directors’ report and cost of capital (CoC), and, second, attempt to investigate the moderating effect of earnings quality on the relationship between readability and CoC.Design/methodology/approachThe sample includes the Egyptian EGX 100 companies, listed from 2013 to 2015, and the study runs two ordinary least square models to test the two main hypotheses. The study applies the LIX formula to calculate the readability level of board of director’ reports and uses the weighted average CoC to calculate CoC. Moreover, the performance-adjusted modified Jones model is used to measure earnings quality.FindingsThe results indicate that in the Egyptian context the readability of board of director’ reports does not impact on CoC. In addition, after moderating by earnings quality, there is a significant association between readability and CoC. The interaction between earnings quality and readability has a significant impact on CoC. This finding is consistent with the notion that, conditional on earnings quality, the benefits of easy writing style in the annual reports, prepared by the company’s managers, are reflected in the reduction of CoC.Originality/valueBased on the limited literature relating to developing countries’ capital markets, this study contributes to the accounting literature by providing empirical evidence on the conditional effect of earnings quality and of the consequences of linguistics style in the emerging market.

APA, Harvard, Vancouver, ISO, and other styles

50

Clatworthy, Mark, and Michael John Jones. "The effect of thematic structure on the variability of annual report readability." Accounting, Auditing & Accountability Journal 14, no. 3 (August 2001): 311–26. http://dx.doi.org/10.1108/09513570110399890.

Full text

APA, Harvard, Vancouver, ISO, and other styles

Journal articles on the topic 'Annual report readability'

Create a spot-on reference in APA, MLA, Chicago, Harvard, and other styles