The topic of readability has been constantly more discussed not only in the accounting literature, but also from practitioners and regulators. The Secutiry and Exchange Commission in the United States published two offical documents, recommending companies to write their annual reports in a readable way, following the best practices appropriate to the audience. In the European environment this topic is still underdeveloped, at least at the regulatory level. In this context, no direct mention of readability can be found. The International Accounting Standard Board only recommends firms to achieve a fair presentation by providing relevant, reliable, comparable and understandable information. Following the international debate surrounding this topic, previous studies examined both the determinants and the economic consequences of annual reports’ readability. However, few studies have been developed employing non-US samples and even fewer considered documents written in languages other than English. Motivated by the international debate surrounding the readability of annaul reports and companies’ fillings, the present study aims at investigating the determinants of annual reports readability of Italian listed companies. We analyse a sample of 1,217 firm-year observations over the period 2006-2012 and proxied readability by number of words and number of pages. Results show that Size and Leverage reduce readability. On the contrary, we highlight that ROA, Return Variance and Institutional Ownership enhance readability. We contribute to the extant literature in the following ways. Fisrt, this is the first study analysing annual reports readability for a panel of Italian listed firms. Second, we add to the literature exploring the determinants of annual reports’ readability, by analysing a sample of documents in a non-English language. Third, we inform regulators about the increasing trend in the number of words/pages in the period examined. Our results should be of interest for practitioners, regulators, standard setters, and investors who are informed about the level of readability of annual reports in Italy and the variables that influence this level.

Determinanti della readability dei bilanci delle società quotate italiane / Tommaso, Dasmi; Giovanni, Liberatore; Francesco, Mazzi. - In: RIVISTA ITALIANA DI RAGIONERIA E DI ECONOMIA AZIENDALE. - ISSN 1593-9154. - STAMPA. - 2016:(2016), pp. 56-71.

Determinanti della readability dei bilanci delle società quotate italiane

LIBERATORE, GIOVANNI;MAZZI, FRANCESCO
2016

Abstract

The topic of readability has been constantly more discussed not only in the accounting literature, but also from practitioners and regulators. The Secutiry and Exchange Commission in the United States published two offical documents, recommending companies to write their annual reports in a readable way, following the best practices appropriate to the audience. In the European environment this topic is still underdeveloped, at least at the regulatory level. In this context, no direct mention of readability can be found. The International Accounting Standard Board only recommends firms to achieve a fair presentation by providing relevant, reliable, comparable and understandable information. Following the international debate surrounding this topic, previous studies examined both the determinants and the economic consequences of annual reports’ readability. However, few studies have been developed employing non-US samples and even fewer considered documents written in languages other than English. Motivated by the international debate surrounding the readability of annaul reports and companies’ fillings, the present study aims at investigating the determinants of annual reports readability of Italian listed companies. We analyse a sample of 1,217 firm-year observations over the period 2006-2012 and proxied readability by number of words and number of pages. Results show that Size and Leverage reduce readability. On the contrary, we highlight that ROA, Return Variance and Institutional Ownership enhance readability. We contribute to the extant literature in the following ways. Fisrt, this is the first study analysing annual reports readability for a panel of Italian listed firms. Second, we add to the literature exploring the determinants of annual reports’ readability, by analysing a sample of documents in a non-English language. Third, we inform regulators about the increasing trend in the number of words/pages in the period examined. Our results should be of interest for practitioners, regulators, standard setters, and investors who are informed about the level of readability of annual reports in Italy and the variables that influence this level.
2016
2016
56
71
Tommaso, Dasmi; Giovanni, Liberatore; Francesco, Mazzi
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Utilizza questo identificatore per citare o creare un link a questa risorsa: https://hdl.handle.net/2158/1040729
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