Examining the readability of accounting narratives derived from earnings management
This study investigates whether language difference affects the readability scores of accounting narratives derived from earnings management practices in 226 companies in the UK, Spain, and Jordan from 2017 to 2021.Our analytical method applies three of the most significant readability measures bas...
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| Format: | Article |
| Language: | English |
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Vilnius Gediminas Technical University
2023-12-01
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| Series: | Journal of Business Economics and Management |
| Subjects: | |
| Online Access: | https://jau.vgtu.lt/index.php/JBEM/article/view/20447 |
| _version_ | 1797352936363261952 |
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| author | Herenia Gutiérrez-Ponce Julian Chamizo González Manar Al-Mohareb |
| author_facet | Herenia Gutiérrez-Ponce Julian Chamizo González Manar Al-Mohareb |
| author_sort | Herenia Gutiérrez-Ponce |
| collection | DOAJ |
| description |
This study investigates whether language difference affects the readability scores of accounting narratives derived from earnings management practices in 226 companies in the UK, Spain, and Jordan from 2017 to 2021.Our analytical method applies three of the most significant readability measures based on the characteristics of each language, as well as multiple linear and logistic regression models, to demonstrate the impact of language differences on the readability of accounting narratives. The findings indicate that earnings management practices significantly affect the readability of accounting disclosures/narratives, and that past financial profitability moderates this relationship. The implications of the findings reported will help decision-makers better understand the quality and readability of accounting narratives derived from companies’ earnings management. Our analysis also has implications for how stakeholders, accounting policymakers, financial statement auditors, and academics understand the relationship between accounting reporting narratives and earnings management.
First published online 17 January 2024
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| first_indexed | 2024-03-08T13:23:01Z |
| format | Article |
| id | doaj.art-d22e9d4048654eb58d31b060392a4be6 |
| institution | Directory Open Access Journal |
| issn | 1611-1699 2029-4433 |
| language | English |
| last_indexed | 2024-03-08T13:23:01Z |
| publishDate | 2023-12-01 |
| publisher | Vilnius Gediminas Technical University |
| record_format | Article |
| series | Journal of Business Economics and Management |
| spelling | doaj.art-d22e9d4048654eb58d31b060392a4be62024-01-17T16:23:22ZengVilnius Gediminas Technical UniversityJournal of Business Economics and Management1611-16992029-44332023-12-0124610.3846/jbem.2023.20447Examining the readability of accounting narratives derived from earnings managementHerenia Gutiérrez-Ponce0Julian Chamizo González1Manar Al-Mohareb2Department of Accounting, Faculty of Economics and Business, Autonomous University of Madrid, SpainDepartment of Accounting, Faculty of Economics and Business, Autonomous University of Madrid, SpainDepartment of Accounting, Faculty of Economics and Business, Autonomous University of Madrid, Spain This study investigates whether language difference affects the readability scores of accounting narratives derived from earnings management practices in 226 companies in the UK, Spain, and Jordan from 2017 to 2021.Our analytical method applies three of the most significant readability measures based on the characteristics of each language, as well as multiple linear and logistic regression models, to demonstrate the impact of language differences on the readability of accounting narratives. The findings indicate that earnings management practices significantly affect the readability of accounting disclosures/narratives, and that past financial profitability moderates this relationship. The implications of the findings reported will help decision-makers better understand the quality and readability of accounting narratives derived from companies’ earnings management. Our analysis also has implications for how stakeholders, accounting policymakers, financial statement auditors, and academics understand the relationship between accounting reporting narratives and earnings management. First published online 17 January 2024 https://jau.vgtu.lt/index.php/JBEM/article/view/20447accounting narrativesreadabilitylanguage varietyearnings managementforeign language effectearnings forecasts |
| spellingShingle | Herenia Gutiérrez-Ponce Julian Chamizo González Manar Al-Mohareb Examining the readability of accounting narratives derived from earnings management Journal of Business Economics and Management accounting narratives readability language variety earnings management foreign language effect earnings forecasts |
| title | Examining the readability of accounting narratives derived from earnings management |
| title_full | Examining the readability of accounting narratives derived from earnings management |
| title_fullStr | Examining the readability of accounting narratives derived from earnings management |
| title_full_unstemmed | Examining the readability of accounting narratives derived from earnings management |
| title_short | Examining the readability of accounting narratives derived from earnings management |
| title_sort | examining the readability of accounting narratives derived from earnings management |
| topic | accounting narratives readability language variety earnings management foreign language effect earnings forecasts |
| url | https://jau.vgtu.lt/index.php/JBEM/article/view/20447 |
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