Chinese annual report readability: measurement and test

Wei Xu, Zhenye Yao and Donghua Chen

China Journal of Accounting Studies, 2019, vol. 7, issue 3, 407-437

Abstract: Among existing researches, readability is an important research direction as a text feature of annual reports. But almost all relevant studies are based on English. In fact, readability in Chinese environment may be a problem worth studying from the perspective of motive and consequence. Accordingly, based on the analysis of the readability indexes of Chinese and English annual reports, this paper constructs three readability indexes and conducts empirical tests. Results show the average word number of each clause, the proportion of adverbs and conjunctions in each sentence, and the arithmetic mean of them are probably a reasonable set of measures. As measures aforementioned, they better meet theoretical expectation and are consistent with relevant research results. Further examinations of other text features found that length of text and count of numbers and tables may not be good measures. Work in this paper provide some basic reference for subsequent researches.

Date: 2019
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DOI: 10.1080/21697213.2019.1701259

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