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The purpose of this paper is to extend and improve prior readability and obfuscation research by investigating the effect of connotation on readability and obfuscation. Furthermore, the paper aims to develop and apply a novel connotation‐based obfuscation assessment approach.

In total, 87 chairman reports of firms included in the Standard & Poor's ASX200 index were analyzed. The readability of sections and connotation‐based groups of sentences within these narratives were assessed using the Flesch readability formula. The presence or absence of obfuscation within the analyzed chairman addresses was determined using a novel connotation‐based obfuscation assessment approach.

The study demonstrates that the mid section within the analyzed chairman addresses was significantly more difficult to read than the first and last sections. However, the notion that these reading difficulty differences were due to the prevalence of positive and negative news within these sections could not be supported. A subsequent analysis of the reading difficulty differences between connotation‐based groups of sentences identified the largely positive group of sentences as an important source of reading difficulty. Finally, the advantages resulting from an application of the connotation‐based obfuscation assessment developed in this paper over the traditional obfuscation assessment techniques used in prior literature are demonstrated.

This paper provides a substantial contribution to the literature by establishing a direct link between the connotation of information provided in financial reporting narratives and the readability and obfuscation exhibited by these narratives. The novel assessment approach developed in this paper can be used to benefit preparers and users of financial reporting information by identifying types of sentences whose preparation and/or analysis should be approached cautiously.

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.

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.

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.

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.

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.

This paper contributes to a modest stream of actor–network analysis directed at accounting research itself.

The objective of this paper is to review the use of the fog index in accounting research.

This paper uses a systematic literature review (SLR) methodology with a sample of 126 accounting research articles. The review applies the theoretical framework of disclosure's stewardship, valuation and accountability roles to identify the contributions and challenges of using the fog index in accounting research.

This paper shows that the primary contribution of the fog index to accounting research relates to the disclosure obfuscation hypothesis (e.g. whether management obfuscates narratives associated with earnings). It also finds that the challenge in using the fog index is in disentangling its measure of firm environmental complexity from narrative obfuscation. Regarding disclosure utility, there is limited evidence on the differential effects of complexity on investor types and whether the fog index findings are associated with narrative obfuscation or firm environmental complexity is driven by investor types.

The authors develop a research database of fog index studies categorised based on contributions to disclosure obfuscation or disclosure utility, highlighting contributions to the stewardship, valuation and accountability roles of disclosures, which researchers can use to develop future studies.

This paper contributes to accounting literature by offering the first comprehensive review on the use of the fog index in accounting research. It offers researchers a consolidated review of the study of linguistic complexity of accounting information and disclosure functions using a theoretical framework that can inform regulators, policymakers and future researchers in designing future research/policy.

The purpose of this paper is to investigate the use of graphs in corporate sustainability reports and attempt to determine, first, whether the use of graphs appears to be associated with attempts at impression management, and second, whether differences across three levels of reporting regulatory structure are associated with differences in the level of impression management.

Based on a sample of 120 sustainability reports issued by firms from six different countries, the authors empirically test for differences in presentation of favourable, as opposed to unfavourable, items (enhancement) and for differences in the direction of materially distorted graphs (obfuscation).

For the overall sample, substantial evidence was found of both enhancement and obfuscation in the graph displays. Also, more limited evidence was found that impression management differs across companies facing different regulatory structures.

The authors investigate graph use for only one year's reports and for a sample of large companies from only six different countries. Further, the enhancement findings are not evidence that the companies are necessarily providing misleading information. However, the results show that the way information is being provided in corporate sustainability reports appears to be manipulated by the firms to enhance a positive image and to obfuscate negative trends. The reports may thus be less about increasing corporate accountability across the social and environmental domains than about managing impressions. Hence, it may be beneficial for advocate organizations, such as the Global Reporting Initiative, to provide additional guidance on “how” information gets portrayed in sustainability reports.

The paper expands prior research into corporate manipulation of graphs to the domain of sustainability reporting and adds further evidence that the reporting needs to be carefully assessed.

This 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.

This 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.

The 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.

Although the study findings suffer from limited global generalization, they can be generalized across Gulf Cooperation Council countries. Thus, future cross-country research is encouraged.

The findings encourage Qatari policymakers to instate a policy for “Plain English” writing to make NDs easy to read by international investors.

This 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.

This study aims to investigate the readability of financial risk disclosure divulged by listed banks of the first five European countries according to gross domestic product.

This study adopts the management obfuscation hypotheses and tests data gathered for a sample of 790 observations from listed banks in Europe covering the 2007–2018 period. This study uses a readability index (Gunning’s fog index) as the dependent variable for measuring the readability of banks’ mandatory financial risk disclosures. Moreover, it relies on a completeness index, discretionary accruals and several control variables for identifying the determinants of risk disclosure readability using ordinary least square regression for testing the hypotheses.

The findings show the existence of a positive relation\nship between readability and completeness of risk disclosure. In contrast, a negative relationship exists between readability and banks’ discretionary accruals.

This study expands the stream of accounting literature analyzing the lexical characteristics of narrative risk disclosure, and, by focusing on the financial risk disclosure of banks, it extends the readability-related debate, which has primarily concentrated on other types of disclosure to date. This study is relevant to regulators and policymakers for fostering reflections as actions for improving the financial risk disclosures readability. This study is also of potential interest for investors to better delve into the questions surrounding risk disclosure.

The paper examines the difference in the disclosure readability of SEC investigated firms and the population of firms traded in the USA. This study aims to further refine the obfuscation hypothesis and broader impression management theory.

The paper used quantitative cross-sectional analysis of archival data gathered from the SEC Accounting and Auditing Enforcement Release Archive and the SEC EDGAR database. A one-sample t-test was used to compare mean readability levels.

The paper provides empirical evidence to support the assertion that disclosures of the firms being investigated for “books-and-records” infractions are more difficult to read than the disclosure of the average publicly-traded firm in the USA.

First, the study did not make direct matched-pairs comparisons of the readability level. Second, the unique nature of the sample means that the results may not be generalizable. Further research is necessary to expand on this current work.

The paper includes implications for consideration by accounting standards setters, financial regulators and annual report readers.

This paper addresses an identified need to study the existence and degree of complexity and obfuscation in financial disclosures.

The purpose of the paper is to investigate the presence of variability within the chairman’s address section of the annual report. The coefficiency of variation (V) is used as a simple statistical measure, with calculations based on three Flesch‐based Reading Ease scores from 100‐word passages of 120 annual reports of Hong Kong public companies for 1994/5. Vs range from 4.83 percent to 89.64 percent and 106 companies have Vs greater than 10 percent. Discernible reading ease patterns are shown to be present according to chi‐square tests. Management propensity to obfuscate is introduced in the form of hypotheses, namely, companies with high variability and low readability will be associated with “bad news” and high levels of press coverage, this last variable being introduced into the readability literature for the first time. The obfuscation was accepted for companies with high financial press coverage.

This research aims to propose an attack that de-obfuscates codes by exploiting the properties of context-free grammars since it is important to understand the strength of obfuscation provided by context-free grammar-based obfuscators. In addition, the possibility of automatically generated transformations is explored.

As part of our empirical investigation, a development environment for obfuscating transformations is built. The tool is used to simulate a context-free obfuscator and to devise ways of reversing such transformations. Furthermore, a theoretical investigation of subset grammars and subset languages is carried out.

It is concluded that context-free grammar-based obfuscators provide limited levels of protection. Nevertheless, their application is appropriate when combined with other obfuscating techniques.

The algorithms behave as expected on a limited number of test samples. Further work is required to increase their practicality and to establish their average reliability.

This research shows how a frequency analysis attack can threaten the security of code scrambled by context-free grammar-based obfuscators.

The obfuscation hypothesis suggests that under‐performing firms will tend to obscure the meaning of their corporate narratives by deliberately adopting a textual complexity, most readily apparent through poor readability and the use of unnecessarily difficult language. This paper seeks to add to the literature in the area by comparing the textual complexity of corporate narratives, notably the chairman's statement, of main board and second board companies on the Bursa Malaysia (formerly known as the Kuala Lumpur Stock Exchange), with their financial performance, and also to examine the impact of company size, board membership and degree of statutory regulation on the readability of corporate narratives.

Following the existing literature this paper uses readability as a proxy for textual complexity, in addition to more direct measures, and seeks to examine relationships between textual complexity and various measures of financial performance.

The findings suggest that there are significant relationships between corporate language and financial performance, but that these are not consistent with the obfuscation hypothesis.

The findings are consistent with the suggestion that increased regulation and statutory monitoring of disclosures are associated with improved readability of narrative. They do not provide support for the obfuscation hypothesis.