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Summary annual reports: length, readability and content
Author(s) -
Bradbury Michael E.,
Hsiao Pei___Chi Kelly,
Scott Tom
Publication year - 2020
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12370
Subject(s) - readability , index (typography) , audit , accounting , annual report , sample (material) , computer science , business , world wide web , chemistry , chromatography , programming language
This paper examines summary annual reports ( SAR ) as an alternative channel for communicating financial information. We use a sample of New Zealand local governments (councils) that are required to report audited SAR . Using various measures, we compare document length and readability of SAR and annual reports ( AR ). We find that SAR are approximately 10 percent of the AR length and both have a ___very difficult___ readability score. We then use a disclosure index to examine the relation between SAR report length and the level of disclosures. After controlling for other factors that impact the level of disclosure, we conclude that the reduction in SAR is driven by lower levels of content. We then discuss the policy implications of our findings.