Linguistic performance and legibility of auditors’ reports with modified opinions

Abstract

Purpose – The purpose of this paper is to measure the understandability of the illustrations provided by the International Federation of Accountants in terms of the structural features of international auditors’ reports with modified opinions. Design/methodology/approach – Measurement of the legibility of reports illustrated by the revised ISA 705 and ISA 706. This paper discusses the compliance level of modified auditors’ reports with the linguistic rules. Findings – It was found that the standardized illustrations of modified reports are not fully understandable by users of financial statements. The illustrations of modified auditors’ reports are not compliant with several linguistic rules. Originality/value – This paper provides new original investigation about the linguistic features of illustrations provided by the ISA 705 and ISA 706. This paper discusses the level of unintelligibility of standardized auditors’ reports and the implications for stakeholders.

The readability of international illustration of auditor's report: An advanced reflection on the compromise between normative principles and linguistic requirements

“…The official translation is reproduced with the permission of IFAC. It is generally accepted that translation work faces several constraints such as: preservation of the meaning of auditing standards; fidelity to the original text; and the maintenance of linguistic performance standards (Fakhfakh, 2015). According to the linguistic measures, the organization of English audit reports is not similar to the structure of reports translated into French.…”

Research on International Standards on Auditing: Literature synthesis and opportunities for future research

“…The fifth research stream examines harmonization of audit reports according to ISAs and concentrates on the degree of harmonization in the form and content of the audit report (Fakhfakh & Fakhfakh, 2010;Farrugia & Baldacchino, 2005;Gangolly, Hussein, Seow, & Tam, 2002;King, 1999). More precisely, on the wording characteristics of audit reports (Fakhfakh & Fakhfakh, 2007;Fakhfakh, Fakhfakh, & Pucheta-Martínez, 2008), the harmonization of audit reporting behavior in bankrupt companies (Sormunen, Jeppesen, Sundgren, & Svanström, 2013), and the linguistic performance and legibility of auditors' reports with modified opinions (Fakhfakh, 2016).…”

“…The recent study by Fakhfakh (2016) tried to assess the level of understandability of the modified audit reports that are recommended by the ISAs. From the perspective of linguistic performance, the international standardization of audit reports was not perfect.…”

“…From the perspective of linguistic performance, the international standardization of audit reports was not perfect. Moreover, it was found that the standardized illustrations of modified reports are not fully understandable by users of financial statements; thus, Fakhfakh (2016) suggested that this phenomenon should lead the IFAC to review its policy of standardization.…”

Readability of corporate reports and impression management

“…Readability refers to how easily written materials can be read and understood and it depends on many factors, including the average length of sentences in a passage, the number of new words a passage contains, the grammatical complexity of the language used (Richards, et al 1992). It is generally confused with legibility, which concerns typeface and layout (Fakhfakh, 2016). To promote readability in corporate reports, regulators and professional accounting organizations took specific steps to improve readability and understandability of financial disclosures.…”