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Discussion of "Annual report readability, current earnings, and earnings persistence"

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  • Bloomfield, Robert

Abstract

Li [2008. Annual report readability, current earnings, and earnings persistence. Journal of Accounting and Economics, this issue, doi:10.1016/j.jacceco.2008.02.003] finds that firms with losses, or with transient income, write annual reports with long sentences and big words. I begin by discussing some explanations for Li's primary results, using his more detailed results, along with the results of related papers, to assess the plausibility of those explanations. I then briefly discuss the 10-K's of a single company over the course of 3 years, to provide more detailed insight into what might drive the length and readability of annual reports. Finally, I present some possible directions for future research.

Suggested Citation

  • Bloomfield, Robert, 2008. "Discussion of "Annual report readability, current earnings, and earnings persistence"," Journal of Accounting and Economics, Elsevier, vol. 45(2-3), pages 248-252, August.
  • Handle: RePEc:eee:jaecon:v:45:y:2008:i:2-3:p:248-252
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    References listed on IDEAS

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    1. Stephen P. Baginski & John M. Hassell & Michael D. Kimbrough, 2004. "Why Do Managers Explain Their Earnings Forecasts?," Journal of Accounting Research, Wiley Blackwell, vol. 42(1), pages 1-29, March.
    2. repec:bla:joares:v:32:y:1994:i:2:p:137-164 is not listed on IDEAS
    3. Graham, John R. & Harvey, Campbell R. & Rajgopal, Shiva, 2005. "The economic implications of corporate financial reporting," Journal of Accounting and Economics, Elsevier, vol. 40(1-3), pages 3-73, December.
    4. Grossman, Sanford J & Stiglitz, Joseph E, 1980. "On the Impossibility of Informationally Efficient Markets," American Economic Review, American Economic Association, vol. 70(3), pages 393-408, June.
    5. Gregory S. Miller, 2002. "Earnings Performance and Discretionary Disclosure," Journal of Accounting Research, Wiley Blackwell, vol. 40(1), pages 173-204, March.
    6. Amy P. Hutton & Gregory S. Miller & Douglas J. Skinner, 2003. "The Role of Supplementary Statements with Management Earnings Forecasts," Journal of Accounting Research, Wiley Blackwell, vol. 41(5), pages 867-890, December.
    7. Basu, Sudipta, 1997. "The conservatism principle and the asymmetric timeliness of earnings," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 3-37, December.
    8. Skinner, Douglas J., 1997. "Earnings disclosures and stockholder lawsuits," Journal of Accounting and Economics, Elsevier, vol. 23(3), pages 249-282, November.
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    Cited by:

    1. Lo, Kin & Ramos, Felipe & Rogo, Rafael, 2017. "Earnings management and annual report readability," Journal of Accounting and Economics, Elsevier, vol. 63(1), pages 1-25.
    2. Dyer, Travis & Lang, Mark & Stice-Lawrence, Lorien, 2016. "Do managers really guide through the fog? On the challenges in assessing the causes of voluntary disclosure," Journal of Accounting and Economics, Elsevier, vol. 62(2), pages 270-276.
    3. Emna JABALLAH & Wided YOUSFI & Mohamed Ali ZARAI, 2014. "Quality of financial reports: Evidence from the Tunisian firms," E3 Journal of Business Management and Economics., E3 Journals, vol. 5(2), pages 030-038.
    4. YAN, Beibei & AERTS, Walter, 2014. "Rhetorical impression management in corporate narratives and institutional environment," Working Papers 2014014, University of Antwerp, Faculty of Applied Economics.
    5. Guay, Wayne & Samuels, Delphine & Taylor, Daniel, 2016. "Guiding through the Fog: Financial statement complexity and voluntary disclosure," Journal of Accounting and Economics, Elsevier, vol. 62(2), pages 234-269.
    6. Hearn, Bruce, 2013. "The institutional determinants of IPO firm prospectus length in a developing context: A research note," Research in International Business and Finance, Elsevier, vol. 27(1), pages 52-65.

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