Search results
1 – 10 of 56Flesch, Fog and Lix readability formulas were used to measure 32randomly selected chairmen′s address and footnote passages from theannual reports of some Hong Kong public…
Abstract
Flesch, Fog and Lix readability formulas were used to measure 32 randomly selected chairmen′s address and footnote passages from the annual reports of some Hong Kong public companies for the years 1986 and 1991. Examines four issues: temporal change in readability levels, influence of industrial grouping on readability, and the relationship between corporate size or profitability on readability levels. Finds that readability is beyond the fluent comprehension levels of 90 per cent of the adult population, overall readability declined over the five‐year period; industrial classification has insignificant impact, and neither company size nor profitability are associated with improved readability levels. These Asian findings are consistent with those from similar studies in the USA, UK, Canada and New Zealand.
Details
Keywords
Mai Mohammed Alm El-Din, Atef Mohammed El-Awam, Farid Moharram Ibrahim and Ahmed Hassanein
The study explores the relationship between information overloading and the complexity of reporting. In particular, it investigates whether voluntary information in a firm annual…
Abstract
Purpose
The study explores the relationship between information overloading and the complexity of reporting. In particular, it investigates whether voluntary information in a firm annual report is associated with its readability. Likewise, it examines how a firm's profitability and earnings management practices impact the nexus of voluntary disclosure and readability.
Design/methodology/approach
It uses the annual reports of the Egyptian nonfinancial firms listed in the EGX 100 index from 2010 to 2018. The readability of the annual report is measured automatically using the LIX index, and a predeveloped voluntary disclosure index is used to measure the level of voluntary disclosure in the annual reports.
Findings
The results reveal that the readability of annual reports is a negative function of voluntary disclosure, suggesting that Egyptian firms with more voluntary disclosure are likely to have more complex (i.e. less readable) annual reports. Likewise, less profitable firms and firms with earning management practices increase voluntary information in their annual reports, resulting in an adverse impact on their reporting readability.
Research limitations/implications
It focuses only on the annual reports of Egyptian firms and considers a firm’s overall voluntary information rather than a particular area of voluntary disclosure. It introduces a code to measure the readability of Arabic-written texts, which can be applied to different areas of disclosure.
Practical implications
Policymakers in Egypt are encouraged to develop enforceable regulations to control voluntary disclosure in annual reports. Egyptian investors should view the practice of higher voluntary disclosure skeptically as its aim may be to divert attention from a firm's poor performance and earnings management practice.
Originality/value
The study is the first evidence from Egypt on the effect of information overloading, proxied by voluntary disclosure, on the readability of reporting. Likewise, it contributes to methodological development in measuring the readability of Arabic-written annual reports.
Details
Keywords
The 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…
Abstract
Purpose
The 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/approach
The 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.
Findings
The 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/value
Based 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.
Details
Keywords
Prabha Rajagopal, Sri Devi Ravana, Yun Sing Koh and Vimala Balakrishnan
The effort in addition to relevance is a major factor for satisfaction and utility of the document to the actual user. The purpose of this paper is to propose a method in…
Abstract
Purpose
The effort in addition to relevance is a major factor for satisfaction and utility of the document to the actual user. The purpose of this paper is to propose a method in generating relevance judgments that incorporate effort without human judges’ involvement. Then the study determines the variation in system rankings due to low effort relevance judgment in evaluating retrieval systems at different depth of evaluation.
Design/methodology/approach
Effort-based relevance judgments are generated using a proposed boxplot approach for simple document features, HTML features and readability features. The boxplot approach is a simple yet repeatable approach in classifying documents’ effort while ensuring outlier scores do not skew the grading of the entire set of documents.
Findings
The retrieval systems evaluation using low effort relevance judgments has a stronger influence on shallow depth of evaluation compared to deeper depth. It is proved that difference in the system rankings is due to low effort documents and not the number of relevant documents.
Originality/value
Hence, it is crucial to evaluate retrieval systems at shallow depth using low effort relevance judgments.
Details
Keywords
Gerard Stone and Lee D. Parker
This paper aims to examine and critique the accounting literature's dominant readability formula, the Flesch formula. Furthermore, the paper sets out to propose refinement and…
Abstract
Purpose
This paper aims to examine and critique the accounting literature's dominant readability formula, the Flesch formula. Furthermore, the paper sets out to propose refinement and augmentation to the formula with a view to expanding its applicability and relevance to researchers' attempts at better understanding and critiquing the effectiveness of accounting communications. This aim extends to setting a more robust foundation for informing policymakers' and practitioners' interest in implementing more effective communications with their target stakeholders.
Design/methodology/approach
The paper offers an historically informed methodological critique of the current articulation and application of the Flesch formula, both generally and in accounting research. This critique forms the basis for developing proposed revisions and supplementary measures to augment Flesch's coverage. These are presented with sample empirics.
Findings
Illustrative examples suggest that it is feasible and desirable to apply a revised formula that reduces Flesch's misplaced emphasis on word length by respecifying its sentence length variable, a probable cause of low readability. A reader attribute score further enhances the formula by integrating the considerable impact of readers' attributes on readability and accounting communication effectiveness. Supplementary measures, comprising non‐narrative communications dimensions, are introduced as a foundation for further research.
Originality/value
The paper provides not only critique but also refinement and augmentation of the much used Flesch readability formula for accounting communications research. It offers a first stage approach to encompassing potentially important communication elements such as readers' attributes, tables, graphs and headings, to date critiqued as potentially important but left unattended by accounting researchers. This offers the prospect of extending Flesch's application to contemporary accounting communications issues and questions.
Details
Keywords
Contextualizes some of the issues raised by an article by Courtis in AAAJ 1995. Readability, which measures syntactical difficulty, should be distinguished from understandability…
Abstract
Contextualizes some of the issues raised by an article by Courtis in AAAJ 1995. Readability, which measures syntactical difficulty, should be distinguished from understandability, which measures comprehensibility. Courtis’s results, which are suggestive (but not conclusive) of a link between readability and profitability are consistent with several other recent readability studies. In addition, his results are consistent with several content analytic studies suggestive of a lack of neutrality in managements’ presentation of accounting narratives. Prior readability studies are shown to provide new information about inter‐country readability differences and the differential readability of differing sections of the annual report. Courtis’s research on English versions of Hong Kong corporate reports raises interesting questions on the use of such texts in countries where English is not the native language.
Details
Keywords
The purpose of this paper is to analyse the accounting research project concerned with accounting narrative obfuscation, focusing on the translation of the concept of readability…
Abstract
Purpose
The purpose of this paper is to analyse the accounting research project concerned with accounting narrative obfuscation, focusing on the translation of the concept of readability from educational psychology via an earlier literature concerned with the readability of accounting narratives per se.
Design/methodology/approach
This paper uses actor-network theory and examines, in particular, the need for a network to accommodate the interests of its actors and the consequent risk of failure.
Findings
The analysis shows that the project is failing because the network seeking to support it is failing, and failing because of its inability to adapt sufficiently to accommodate the interests of its constituents. This failure is contrasted with the earlier concern with readability per se, which did see a successful reconfiguration of actors’ interests.
Research limitations/implications
The puzzle of the maladjustment of the network concerned with obfuscation is examined and it is suggested that it is a consequence of interests prevailing in the wider academic research network within which the relevant human actors are embedded.
Social implications
The reasons for the failure of the project are bound up in the wider circumstances of the contemporary accounting research community and may affect scholars’ capacity to pursue knowledge effectively.
Originality/value
This paper contributes to a modest stream of actor–network analysis directed at accounting research itself.
Details
Keywords
Acklesh Prasad, Peter Green and Jon Heales
This paper aims to investigate whether organisations in developing economies legitimise their level of profit.
Abstract
Purpose
This paper aims to investigate whether organisations in developing economies legitimise their level of profit.
Design/methodology/approach
Organisations’ level of profit is evaluated against the readability of sections of information available in the corporate annual reports. These sections include the Chairman’s Report, the Chief Executive Officer Report and the Notes to the Accounts.
Findings
More profitable organisations report more readable information in their corporate annual reports. Information in the non-mandatory sections of the report (Notes to the Accounts) is more readable compared to the information in the mandatory sections of the report (Chairman’s Report). Larger organisations report more readable information. Public Enterprises report more readable information compared to the Publicly Listed Companies.
Research limitations/implications
Organisations in the developing economies are aware of their role in their society. They respond to instances of possible violation of the implied social contract by sharing information in ways that relays news in certain ways.
Practical implications
Evidence of presence of legitimising activities by organisations would imply the need to strengthen the regulatory and monitoring guidelines to ensure efficient use of society’s resources and a fair rent charge for the utilities.
Social implications
There is a greater need to monitor and question organisations’ level of earned profit to ensure it is necessary to maintain their operations.
Originality/value
This study is the first attempt to investigate organisations’ immediate legitimising activities in relation to their reported profit.
Details
Keywords
Malcolm Smith and Richard Taffler
Adopts an empirical approach to demonstrate that a markeddifference exists between the terms “readability” and“understandability”, suggesting that “readingease”, as measured by…
Abstract
Adopts an empirical approach to demonstrate that a marked difference exists between the terms “readability” and “understandability”, suggesting that “reading ease”, as measured by formulae like FLESCH and LIX based on word and sentence complexity, conveys data which may be different to that conveyed by tests of the understandability of the message. The CLOZE method is used as a measure of understandability with audiences of differing accounting sophistication to measure the predictability of the narrative and to demonstrate inter‐group and inter‐formulae distinctions. Analysis of the results suggests that readability and understandability are different concepts and that standard setters should pay more attention to “understandability” as a desirable characteristic of accounting disclosures since there is a danger that the intended messages are of a complexity beyond the sophistication of the target audience.
Details
Keywords
Adele Berndt and Jane P. Wayland
Locally authored textbooks are used at tertiary South African institutions to assist in marketing research studies. The purpose of this paper is to investigate the readability of…
Abstract
Purpose
Locally authored textbooks are used at tertiary South African institutions to assist in marketing research studies. The purpose of this paper is to investigate the readability of locally authored marketing research textbooks in South Africa and compare them with international (USA) texts.
Design/methodology/approach
South African marketing research textbooks (authored locally) used at South African institutions were identified. Electronic versions of the textbooks were used and analysed using accepted readability formulae. The same procedure was used with texts produced in the USA and the findings of each were compared.
Findings
The South Africa texts scored higher on the Flesch Reading Ease score than US texts, which links to the target audience of these books (undergraduate students), while also being cognisant of the reading skills of the target audience but their score still describes them as “difficult”.
Research limitations/implications
The original formulae and theory tend to be dated, though there are recent studies into readability in other areas of business studies. There are also those that question the applicability of readability formulae in the tertiary environment.
Practical implications
Instructors need to ensure that material is at a suitable reading level to maximise the student's learning. For publishers and authors, this means that the examples and illustrations used need to be linked to the context in which the student lives and functions, and not just focus on the English used in the text.
Originality/value
While studies have been conducted into the readability of US textbooks, there is little published research into the readability of regional marketing research textbooks in other contexts to facilitate comparison.
Details