A plain English measure of financial reporting readability

• 成果类型: Article
• 署名作者: Bonsall, Samuel B.; Leone, Andrew J.; Miller, Brian P.; Rennekamp, Kristina
• 署名单位: University System of Ohio; Ohio State University; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; University of Miami; Indiana University System; Indiana University Bloomington; Cornell University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2017.03.002
• 发表日期: 2017
• 关键词: TEXTUAL ANALYSIS; disclosure; INFORMATION; complexity; investors

摘要

We propose a new measure of readability, the Bog Index, which captures the plain English attributes of disclosure (e.g., active voice, fewer hidden verbs, etc.). We validate this measure using a series of controlled experiments and an archival-based regulatory intervention to prospectus filing readability. We also demonstrate the importance of understanding the underlying drivers of quantity-based measures of readability. In particular, we caution researchers that a vast amount of the variation in Form 10-K file size over time is driven by the inclusion of content unrelated to the underlying text in the 10-K (e.g., HTML, XML, PDFs). (C) 2017 Elsevier B.V. All rights reserved.