Readability of Accounting Disclosures: A Comprehensive Review and Research Agenda*

Abstract

Understanding corporate disclosures is important for accounting researchers, as information plays a central role on financial markets. A generation of accounting and finance researchers has shown how readability of different financial and nonfinancial disclosures affects our understanding of organizational behaviors. We review 138 papers from 1950 to 2020 using the five Ws analysis method (Who, What, HoW, Why, and to Whom) developed by Culiberg and Mihelic ˇ(2017). We organize the literature into a comprehensive framework, the readability wheel, which provides an overview of existing studies, helps with understanding the complexity and issues of readability, and outlines an agenda for future research. We also use the readability wheel to discuss the evolution of these studies.

The fog index in accounting research: contributions and challenges

“…For example, Jones & Shoemaker, (1994) reviewed readability methodology and measures. Gosselin et al (2021) report a broad overview of readability research issues using the readability wheel of who, what, how, why and to whom, while Smaili et al (2022) focus on the top management strategy for managing readability.…”

“…This review adds to prior review on readability studies (Gosselin et al, 2021;Jones & Shoemaker, 1994;Smaili et al, 2022) by reviewing the theoretical application of a readability measure (the fog index) to the role of disclosures. This review relates readability research to accounting disclosure.…”

“…For example, Jones and Shoemaker (1994) reviewed readability methodology and measures. Gosselin et al (2021) report a broad overview of readability research issues using the readability wheel of who, what, how, why and to whom, while Smaili et al (2022) focus on the top management strategy for managing readability. This review adds to the prior review on readability studies (Gosselin et al, 2021;Jones and Shoemaker, 1994;Smaili et al, 2022) by reviewing the theoretical application of a readability measure (the fog index) to the role of disclosures.…”

“…2008 is the year of the first large-sample accounting publication using the fog index (Beattie, 2014). The selection of this timeline also allows the study to focus on recently published fog index studies to contribute to the ongoing debate on the relevance of the fog index rather than replicating the review of studies included in existing reviews (Gosselin et al, 2021;Jones and Shoemaker, 1994). Table 1 panel A reports the systematic literature retrieval process.…”

تأثیر قابلیة التقاریر المالیة السنویة للقراءة على تكلفة رأس المال المقترض وأتعاب عملیة المراجعة: دراسة تطبیقیة على الشركات المدرجة بالبورصة المصریة

“…‫باح‬ ‫األر‬ ‫ة‬ ‫إدار‬ ‫و‬ ‫المستقبلي‬ ‫األداء‬ ‫مثل:‬ ‫التمويل‬ ‫و‬ ‫المحاسبة‬ ‫ات‬ ‫متغير‬ ‫من‬ ‫كبير‬ ‫عدد‬ ‫على‬ ‫اءة‬ ‫للقر‬ (Ajina et al, 2016;Li, 2008) ‫االستثمار‬ ‫وكفاءة‬ ، (Biddle et al, 2009) ‫الماليين‬ ‫المحللين‬ ‫وسلوك‬ ، (Aymen et al, 2018;Lehavy et al, 2011) ‫األسهم‬ ‫في‬ ‫ين‬ ‫للمستثمر‬ ‫التداول‬ ‫وسلوك‬ ، (Lawrence, 2013;Miller, 2010) ‫باح‬ ‫باألر‬ ‫التنبؤ‬ ‫أخطاء‬ ‫و‬ ‫ائد‬ ‫العو‬ ‫وتقلب‬ ، (Loughran & McDonald, 2014) ‫األسهم‬ ‫أسعار‬ ‫انهيار‬ ‫وخطر‬ ، (Kim et al, 2019) ‫المعلومات‬ ‫تماثل‬ ‫وعدم‬ ، (Dalwai et al, 2021;Luo et al, 2018 (Bloomfield, 2008;Gosselin et al, 2021;Li, 2008;Lo et al, (Courtis, 1987(Courtis, , 1995Jang & Rho, 2016;Li, 2008 (Ayuningtyas & Harymawan, 2021;Ertugrul et al, 2017;Fang-Klingler, 2019;Hoffmann & Kleimeier, 2021 (Abernathy et al, 2019;Blanco et al, 2021;Salehi et al, 2020;Wang et al, 2021;Xu et al, 2020b (Bloomfield, 2008;Gosselin et al, 2021;Li, 2008;Lo et al, 2017) : (Ayuningtyas & Harymawan, 2021;Courtis, 1995;De Franco et al, 2015;Ferri et al, 2022;Hassan et al, 2019;…”