Understandability of Narratives in Annual Reports

Journal of Technical Writing and Communication Oct 1997

Understandability of Narratives in Annual Reports

Stellan Nilsson Umeå University

Abstract

This article shows problems in the communication process between preparers and users of financial reports. In Sweden as well as in other European countries, understandability of financial reports is a qualitative characteristic that is increasingly focused on. This is partly due to the growing significance of the stock market as a source for venture capital. Test techniques from linguistics and pedagogy have been used in accounting research to investigate the understandability of financial reports. The cloze technique is used in this study to investigate the understandability of messages in two Swedish annual reports related to small investors, and sophisticated preparers and users such as auditors and financial managers. The results show that important parts of the reports were not understood by small investors. The conclusion is that if small investors are continuingly to be considered as a target group for these financial reports, then there must be a large improvement of the text material. Otherwise the financial reports must be left to sophisticated users and interpreters.

Journal: Journal of Technical Writing and Communication
Published: 1997-10-01
DOI: 10.2190/f7fc-hja6-w2p5-u2j3
Open Access: Closed
Topics: rhetorical theory multilingual writers

Citation Context

Cited by in this index (2)

Lord (2002)

Annual Reports: A Literature Review (1989–2001)

Journal of Technical Writing and Communication
Clements (2000)

Plain English in Corporate Disclosures: Review and Implications for Consumers, …

Journal of Technical Writing and Communication

Cites in this index (1)

Shaffer et al. (1993)

Assessing the Readability of Government Accounting Standards: The Cloze Procedure

Journal of Technical Writing and Communication

Also cites 12 works outside this index ↓

10.1108/09513579210019549

↗
10.1007/978-1-349-16895-8

↗
10.1080/00014788.1986.9729329

↗
10.1177/002194369202900404

↗
Haried A. A., The Semantic Dimensions of Financial Statements, Journal of Accounting Research, pp. 376–391, A…

↗
Oliver B. L., The Semantic Differential: A Device for Measuring the Interprofessional Communication of Select…

↗
Taylor W., Cloze Procedure: A New Tool for Measuring Readability, Journalism Quarterly, pp. 415–433, Fall 1953.

↗
10.2307/2490519

↗
Kanuk L. and Berenson C., Mail Surveys and Response Rates: A Literature Review, Journal of Marketing Research…

↗
10.1007/978-1-349-11336-1

↗
10.1177/002194368702400202

↗
Adelberg A. H., The Accounting Syntactic Complexity Formula: A New Instrument for Predicting the Readability …

↗

CrossRef global citation count: 7 View in citation network →