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In 2015, Bursa Malaysia Berhad (BMB) issued the first edition of the Sustainability Reporting Guide (SRG 1.0) to aid Malaysian public listed companies (PLCs) in preparing corporate social responsibility reporting (CSRR). After receiving users' commentaries, BMB issued the second edition of SRG (SRG 2.0) in 2018. Given the major amendments in CSRR regulatory guidelines, there is a need to analyze the readability of CSRR in light of the new guide and to investigate the combined effects of SRG 2.0 and the assurance of CSR information on the readability of CSRR.

This study employs two readability indices to compare the readability of CSRR ex-ante and ex-post the implementation of SRG 2.0 across a sample of Malaysian PLCs that maintained their market capitalization among the top 100 companies.

The practical findings of the multivariate regression revealed that the readability of CSRR is reduced after the introduction of SRG 2.0. Meanwhile, the readability of CSRR is positively influenced by combining the effect of SRG 2.0 and CSRR assurance.

This study provides empirical evidence that the amendment to CSRR has made CSR reports more challenging to read and thus reduces their communicative value. Therefore, in their quest to mandate more CSRR information from companies, regulators might need to consider advocating that such data is reported in a readable manner. This study also shows the influential role of CSR information assurance in enhancing the readability of CSRR.

This study helps assess the readability of CSRR among Malaysian companies after the adoption of SRG 2.0. It also contributes to the literature on CSRR, as the readability of such reporting within the context of Malaysia has not been widely examined in previous studies.

This paper aims to investigate the moderating effect of sustainability reporting on the relationship between the independent variables of board diversity, and earnings management and the dependent variable of readability of financial statements.

The study panel data regression analysis involved 36 Kenyan-listed companies from 2016 to 2020.

Key findings were that increased board diversity was found to significantly improve the readability of financial statements. Discretionary earnings management was found to significantly reduce the readability of financial statements. Sustainability reporting was found to significantly increase the readability of financial statements, and it moderated the relationship between board diversity, earnings management and financial statements readability in Kenya.

The study sample of 36 non-financial listed in the Nairobi Securities Exchange was very small and was affected by the problem of thin trading; hence, caution should be adopted when interpreting the findings.

The Capital Markets Authorities (CMA) as a policymaker should enforce sustainability reporting by Kenyan listed firms as there is evidence that the reporting enhances the readability of financial statements. The Institute of Certified Public Accountants as a policymaker should closely monitor the published financial statements of firms for earnings management and punish the perpetrators, as there is empirical evidence that the practice reduces the readability of financial statements.

Sustainability reporting is successful as a moderating variable between readability of financial statements and determinants of readability of financial statements.

This study contributes to knowledge by studying sustainability reporting as a moderating variable between the independent variables of board diversity and earnings management and the dependent variable of readability of financial statements and measured sustainability reporting using a dummy variable for the period before and after the enactment and release of CMA code of 2016 on corporate governance that required sustainability reporting by Kenyan listed companies.

This study aims to mainly explore the impact of business strategy and annual reports readability on financial reporting quality in Tehran Stock Exchange (TSE).

The sample comprised 160 companies listed in TSE from 2014 to 2020. Five proxies (including two accounting-based attributes and two market-based attributes) were used to measure financial reporting quality. In this study, cost leadership and differentiation strategies were considered and Fog index was used to measure the annual report readability.

The results showed that in all methods of calculating financial reporting quality, cost leadership strategy, differentiation strategy and annual report readability had a positive and significant impact on financial reporting quality. Also, only at the high level of the differentiation strategy, the annual reports readability influenced financial reporting quality. In addition, at all levels of high and low annual report readability, cost leadership strategy affected financial reporting quality, but only in companies with a high annual report readability, the differentiation strategy affected financial reporting quality. Only for companies with a low readability, the annual report readability affected financial reporting quality.

To the best of the authors’ knowledge, no study had examined the impact of business strategy and annual report readability on financial reporting quality at the core of the present study. Furthermore, little was known about the strategic choices made in Iran. So, the research filled this gap in TSE. This study provided insights for policymakers to enhance the readability and reduce the complexity of annual reports.

The purpose of this study is to explore whether pension plan reporting readability affects earnings volatility. Moreover, as SFAS 158 requires firms to fully recognize their funded status on the balance sheet, the firms’ pension liabilities (inside debts) and financing ability have the corresponding change. This study further investigates whether pension plan reporting readability affects earnings volatility from the SFAS 158 and funded status perspectives.

This study follows Li (2008), Lehavy et al. (2011) and Rennekamp (2012) to use the FOG and SMOG variables as the readability proxies and investigates whether pension plan reporting readability affects earnings volatility from the perspectives of inside debts and SFAS 158 by using a sample of 3,077 American firms from the year 2006 to 2009.

Empirical results of this study show that firms with low readability of pension plan reporting have high earnings volatility, revealing that less readable pension plan reporting increases the assessed variance of a firm’s inside debts, financing flexibility, investment ability and therefore profitability. In addition, the implement of SFAS 158 enhances the effect of pension plan reporting readability on earnings volatility. Moreover, the authors also find that the funded status plays a moderating role for the effect of pension plan reporting readability on earnings volatility. Finally, the results are robust to endogeneity issue.

Earnings stability measures how consistently earnings have been generated over time, and its importance has been acknowledged by most firms. For example, prior literature has documented that manipulating financial reporting to smooth earnings is becoming a business common practice (Burgstahler et al., 2006; Liu and Espahbodi, 2014). The empirical results suggest that pension plan reporting readability is a significant determinant of earnings volatility.

As a practical implication, this study points out that manipulations of the pension reporting readability are not costless. It incurs the costs of earnings instability.

This study indicates that the issuance of SFAS 158 makes firms more likely to engage in pension plan readability manipulation. As a result, it has policy implication that the regulator should consider how the policy change alters the firm financial reporting behavior.

The empirical results suggest that firms may be more likely to engage in obfuscating pension plan disclosure after FASB’s issuance of SFAS 158. This would further increase outside investors’ assessed variance for inside debts and earnings volatilities. When policymakers require firms to recognize their funded status in statement of financial position, they should consider the costs or benefits that the firm manager face and, therefore, how this policy change alter the firm financial reporting behavior.

The regulatory review process imposes significant costs on companies. Therefore, managers try to find ways to avoid the regulatory review risk. The purpose of this paper is to investigate whether corporate reporting readability reduces the regulatory review risk.

This study measures the corporate reporting readability using the Fog Index. It measures the regulatory review risk using the probability of receiving a comment letter from the Securities and Exchange Organization of Iran.

The findings reveal that corporate reporting readability reduces the regulatory review risk, after controlling for the factors that affect the regulatory review risk.

The current paper identifies an easy strategy for managers to mitigate one of the important risks faced by companies. Thus, the results will be of interest to managers, audit committees, and stakeholders involved in the regulatory review process.

This is an exploratory study to investigate the readability of integrated reports. The aim of this paper is to assess whether integrated reports are accessible to their readership and add value to stakeholders.

Readability analyses are performed on the integrated reports of all companies listed on the Johannesburg Stock Exchange for 2015 and 2016. Readability results are compared by means of a correlation analysis to the results of the Ernst & Young Excellence in Integrated Reporting Awards for 2015.

The results show that the complex nature of the language used in integrated reports of listed companies impairs readability and, as an implication, affects the value stakeholders can derive from the information. The results from the correlation with the Ernst & Young Excellence in Integrated Reporting Awards indicate that an integrated report is considered of higher quality if it is written using complex language.

The main limitation of the study lies in its exclusively South African setting, which is the only country where integrated reports are recommended as part of stock exchange listings requirements. Another limitation is the fact that integrated reports are mainly aimed at informed users and is thus compiled with the informed reader in mind, which impacts on general readability.

The results present new findings regarding integrated reporting practice, which is of interest to firms, investors, regulators, amongst others. The findings show how the value-added by integrated reports could be improved.

This study is the first to investigate the readability of integrated reports in a South African context. The results indicate that integrated reports are difficult to read and are only useful to a portion of the total intended population.

A goal of integrated reporting (IR) under the International Integrated Reporting Council (IIRC)’s leadership is to provide clearly written, comprehensible and accessible information. In light of this objective, the purpose of this paper is to explore the readability and accessibility of integrated reports, an issue magnified by the IIRC’s continual commitment to clear and readable report language, and its intention for IR to become the corporate reporting norm.

In a whole text software facilitated analysis, the study utilises readability measures and supplementary measures of reader accessibility in a multi-year analysis of a large sample of global integrated reports sourced from the IIRC examples database.

The findings highlight the low readability of analysed integrated reports and indicate that readability is not improving. The supplementary measures suggest sub-optimal use of visual communication forms and overuse of structural presentation techniques which may contribute to reader accessibility of the analysed reports.

The study extends readability analysis to an emerging corporate reporting phenomenon and its findings contribute to the growing IR literature. The study applies supplementary measures of reader accessibility which advance the methods available to assess the communication efficacy of integrated and other corporate reports.

The analysis of the readability and accessibility of integrated reports in the study indicates that the IIRC’s goal of clear, comprehensible and accessible reporting is not reflected by reporters’ practices. This has implications for the IIRC, reporting organisations, report readers and regulators.

The study represents the first large-scale analysis of the readability and accessibility of global integrated reports.

This paper aims to explore the relationship between the readability of sustainability reports and chief executive officer (CEO) attributes, comprising monetary, non-monetary incentives and personal characteristics.

The study is based on an international sample of companies operating in sustainability-sensitive industries during 2016–2018.

The results prove that CEO monetary incentives, as well as CEO non-monetary incentives, negatively influence the readability of sustainability reports, revealed in a positive relationship with readability indexes, by providing reports with greater reading difficulty. Additionally, this study shows evidence about the relation of complementarity between these incentives. Other CEO characteristics have no significant effect on the readability of sustainability reports.

This research sheds the light on the role of CEO incentives in obfuscating sustainability information to portray the company, operating in sustainability-sensitive industries, in a favorable image.

The purpose of this study is to investigate the influence of IFRS convergence on annual report readability in an emerging market context, with an emphasis on the contents of management discussion and analysis (MD&A), notes to the accounts (Notes) and the whole annual report.

The study performs firm-fixed effect regression on a sample of 143 Indian listed companies over a period spanning from 2012 to 2021 to examine the influence of IFRS convergence on readability. This assessment primarily focuses on broader spectrums of readability dimensions, namely annual report length and complexity, wherein complexity is measured using the Gunning Fog, Flesch Reading ease and Flesch-Kincaid grade index.

As Indian firms shift to IFRS reporting, the findings suggest that annual reports have become significantly lengthier and more complex, causing deterioration in readability. The Notes section, in particular, exhibits the most significant increase in length and complexity, followed by the entire annual report and MD&A section. Furthermore, the findings also indicate that the complexity of the Notes section is instrumental in the observed complexity growth of the whole annual report in the post-IFRS period.

The current study employs readability indices rather than directly taking into consideration the opinions of actual users of annual reports to determine readability. As a result, the study does not provide direct evidence on how information in annual reports affects users' readability.

The findings provide insightful information to managers and policymakers about the difficulties stakeholders may encounter while reading IFRS-based annual reports, which ultimately impact their investment decisions. Thus, there is an important managerial implication from this, depending upon the severity of complexity corporations participate in while complying with IFRS in the post-IFRS period.

Analyzing the influence of exogenous information shock, such as IFRS convergence, on readability is critical, particularly for emerging markets like India, where a lack of financial literacy and weaker enforcement already have detrimental effects on the capital market. In light of this, the current study provides a comprehensive examination of the impact of IFRS convergence on annual report readability and contributes to the growing IFRS literature in the less explored emerging market context.

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.

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.

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.

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.

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.

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.