Journal of Accounting and Economics Vol. 45 No. 2-3 2008
Annual report readability, current earnings, and earnings persistence
Abstract
This paper examines the relation between annual report readability and firm performance and earnings persistence. I measure the readability of public company annual reports using the Fog index from the computational linguistics literature and the length of the document. I find that: (1) the annual reports of firms with lower earnings are harder to read (i.e., they have a higher Fog index and are longer); and (2) firms with annual reports that are easier to read have more persistent positive earnings.
- DOI
- 10.1016/j.jacceco.2008.02.003
- Volume
- 45
- Issue
- 2-3
- Pages
- 221-247
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref