Assessing the effectiveness of investors' judgments on the readability of disclosure of the company's financial statements

Subject Areas : Financial Economics

Seyyed Zahra Mousavi ¹ , Ahmad Kaabomeir ² , Saeed Nasiri ³

1 - Accounting Department, Ahvaz Branch, Islamic Azad University, Ahvaz, Iran
2 - Accounting Department, Ahvaz Branch, Islamic Azad University, Ahvaz, Iran (author and responsible
3 - Accounting Department, Ahvaz Branch, Islamic Azad University, Ahvaz, Iran

Received: 2023-04-06 Accepted : 2023-06-11 Published : 2023-06-22

Keywords: G17, G11, Keywords: Decision Making - Performance Evaluation - Fluency Processing – Validity Management - Company Evaluation. JEL classification: M41,

Abstract :

Abstract The readability of disclosure of financial reports in Iran is considered one of the relatively new issues that has not been addressed much and its impact on the financial and operational variables of companies as well as investors and decision makers has not been measured and evaluated. Therefore, the present study has evaluated the effectiveness of investors' judgments on the readability of the disclosure of the company's financial reports. In terms of the purpose, this research is considered one of the applied researches, and in terms of the method, the research is based on correlation analysis. To collect the data of this research, 120 active investors in the stock exchange were selected and data were collected with the help of a scenario. The results showed that when the company's financial reports have low readability of disclosure, the sensitivity of investors' evaluation judgments is affected and increases, but when the readability of disclosure is low, the psychological processing of investors will not be affected. In addition, it was found that when the company's financial reports have low disclosure readability, the intensity and efficiency of the search for external information by investors increases, but the amount of investors' reliance on external information does not change.

References:

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