INTELLIGIBILITY VS READABILITY: UNDERSTANDABILITY MEASURES OF FINANCIAL INFORMATION

  • Samantha Valentim Telles Universidade Anhembi Morumbi, professora
  • Bruno Meirelles Salotti Universidade de São Paulo - USP

Resumo

Decision-making is influenced by information, which must be understood so it can be useful. However, measuring understandability is not a simple task. Previous studies use readability metrics as proxies for understandability, but readability is a shallow metric ignoring discourse and language components. This research analyzes the notes to the financial statements using intelligibility metrics, an alternative to readability measures. Our sample comprised 44 Brazilian firms that presented their Portuguese notes (native language) and English (non-native) from 2012 to 2015. Focusing on the notes of Financial Instruments and Provisions, we found that, for most indexes where firms had worse readability levels, they showed better intelligibility levels. It indicates that both metrics measure different things. Our results also indicated that language impacts these metrics and that firms did not improve their information quality after the guideline OCPC 07 from the Brazilian Accounting Standards Committee.

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Publicado
Abr 26, 2021
Como citar
VALENTIM TELLES, Samantha; MEIRELLES SALOTTI, Bruno. INTELLIGIBILITY VS READABILITY: UNDERSTANDABILITY MEASURES OF FINANCIAL INFORMATION. Revista Universo Contábil, [S.l.], v. 16, n. 2, p. 110-126, abr. 2021. ISSN 1809-3337. Disponível em: <https://proxy.furb.br/ojs/index.php/universocontabil/article/view/8771>. Acesso em: 04 dez. 2022. doi: http://dx.doi.org/10.4270/ruc.2020209.
Seção
Seção Internacional

Palavras-chave

Readability; Intelligibility; Financial Information; Notes to the financial statements.