Business Strategy, Financial Reporting Readability, Prospectors Strategy, Defenders Strategy.
Subject Areas : Futurology
zabiholah khani
1
,
Hossein Rajabdorri
2
,
Nasim Sharafi
3
1 - Assistant Professor, Department of Accounting, Fasa Branch, Islamic Azad University, Fasa, Iran
2 - Accounting Ph.D student and Member of Young Researchers and Elite Club, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran
3 - MSc Student of Accounting, Fasa Branch, Islamic Azad University, Fasa, Iran
Keywords: Defenders Strategy, Prospectors Strategy, Business Strategy, Financial Reporting Readability,
Abstract :
The purpose of this study is to investigate the relationship between prospective and defenders business strategies and the readability of financial reporting. Companies with different strategies have different information environments that may indicate the relationship between business strategy and financial reporting legibility. The Fog index and the length of the text were used to examine the readability of financial reporting. This research is an applied objective and its period is from 2013 to 2017 and a sample of 163 companies accepted in Tehran Stock Exchange. To test the research hypotheses, the least squares method was used in Eviews software. The findings of the research hypothesis test indicate that there is a positive and significant relationship between prospective and Defenders business with financial reporting scruple, which is stronger in future Prospectors companies. A partial review of the research hypotheses suggests that the level of relationship between the Prospectors business strategy and the Fog (H 1) index and the length of the text (H 2) is 46% and 49%, respectively. Also, the level of relationship between the Defenders business strategy and the Fog index (H 3) and the length of the text (H 4) is 31% and 29%, respectively. Consequently, in the interests of greater transparency and clarity, more attention is needed to the company's business strategy.
_||_