A Plain English Measure of Financial Reporting Readability

  title={A Plain English Measure of Financial Reporting Readability},
  author={Samuel B. Bonsall and Andrew J. Leone and Brian P. Miller and Kristina Rennekamp},
  journal={Journal of Accounting and Economics},
We propose a new measure of readability, the Bog Index, which captures the plain English attributes of disclosure (e.g., active voice, fewer hidden verbs, etc.). We validate this measure using a series of controlled experiments and an archival-based regulatory intervention to prospectus filing readability. We also demonstrate the importance of understanding the underlying drivers of quantity-based measures of readability. In particular, we caution researchers that a vast amount of the variation… Expand

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