Readable Reports Research Articles

Computer-assisted generation of anaesthesia report during laparoscopic procedures

Abstract Automatic generation of intraoperative anaesthesia reports has great potential to generate accurate and efficient documentation and allow the anaesthesiologists to utilise their time more optimally. However, automatically generating anaesthesia reports represents a demanding component in future operating rooms. In this paper, a computer-assisted system for anaesthesiology report generation during laparoscopic surgery is proposed. Data from anaesthesia machine, patient monitor, and surgical devices were acquired and analysed. The system proved to generate more accurate, efficient, and better readable reports compared to hand-written ones by clinicians. Moreover, additional information that describes surgical activities and events was also added by analysing surgical data.

Navigating the haze: Environmental performance feedback and CSR report readability

Despite the prevalence of comprehensive discussions on coping strategies for financial performance feedback, firms’ responses to environmental performance feedback, which possess distinct frames compared to financial performance feedback, remain insufficiently explored. To address this gap, our study explores how firms employ less readable reports in response to environmental performance feedback. We argue that firms receiving negative or positive feedback tend to produce reports with low readability, bewildering stakeholders, while those with environmental performance close to their aspirations are more likely to present clear, highly readable reports. Our findings indicate an inverted-U-shaped relationship between environmental performance feedback and corporate social responsibility report readability. Furthermore, we found that ascribed and achieved political connections have negative and positive moderating effects on this nonlinear relationship, respectively. Our arguments are supported by a sample of Chinese small and medium-sized enterprises from 2010 to 2017.

Automated text analyses of sustainability & integrated reporting. A literature review of empirical-quantitative research

PurposeThis study aims to focus on automated text analyses (ATAs) of sustainability and integrated reporting as a recent approach in empirical–quantitative research.Design/methodology/approachBased on legitimacy theory, the author conducts a structured literature review and includes 38 quantitative peer-reviewed empirical (archival) studies on specific determinants and consequences of sustainability and integrated reporting. The paper makes a clear distinction between analyses of reports due to readability, tone, similarity and specific topics. In line with prior studies, it is assumed that more readable reports with less tone and similarity relate to increased reporting quality.FindingsIn line with legitimacy theory, there are empirical indications that specific corporate governance variables, other firm characteristics and regulatory issues have a main impact on the quality of sustainability and integrated reporting. Furthermore, increased reporting quality leads to positive market reactions in line with the business case argument.Research limitations/implicationsThe author deduces useful recommendations for future research to motivate researchers to include ATA of sustainability and integrated reports. Among others, future research should recognize sustainable and behavioral corporate governance determinants and analyze other stakeholders’ reactions.Practical implicationsAs both stakeholders’ demands on sustainability and integrated reporting have increased since the financial crisis of 2008–2009, firms should increase the quality of reporting processes.Originality/valueThis analysis makes major contributions to prior research by including both sustainability and integrated reporting, based on ATA. ATAs play a prominent role in recent empirical research to evaluate possible drivers and consequences of sustainability and integrated reports. ATA may contribute to increased validity of empirical–quantitative research in comparison to classical manual content analyses, especially due to future CSR washing analyses.

Religiosity at the Top and Annual Report Readability

This paper examines how individual religiosity at the top level of organizations affects the quality of their disclosure practices, as measured by the readability of annual reports. Our paper extends the recent accounting and finance literature that moves away from a location-based measure to an individual-based measure for capturing the effect of religiosity. Our findings suggest that the individual religiosity of C-suite executives matters in corporate decision-making and has positive implications for the quality of corporate disclosure practices, as reflected by more readable reports. This main finding is primarily driven by the religiosity of CEOs. Additional findings also suggest that the effect of religiosity is not solely driven by the religious denomination of the majority group within a given location-based setting. Previous research using religiosity proxies based on the majority religion in the locale of firms’ headquarters may have measurement issues that disguise the effect of religiosity. This issue is particularly problematic when CEOs or other executives participate in minority religious denominations. Overall, our paper finds that CEO religiosity is an important attribute that affects the overall quality of business practice.

Readability as a measure of textual complexity: determinants and evidence in Brazilian companies

ABSTRACT The aim of this article was to evaluate the effect of company earnings and of harmonization with IFRS on the readability of Management Reports in the Brazilian stock market. There is a gap to be filled both in the elaboration and adaptation of readability measures to the context studied, as the studies tend to replicate the original formulas, and in identifying the determinants of the readability of Brazilian company reports, as the research in this field remains in its infancy and the results are inconclusive. The results provide indications for investors to identify complex textual information and may help public policymakers to establish a simple writing manual, along the lines of the SEC’s 1998 Plain English Handbook. The modified metrics and the one developed overcome the criticisms regarding the use of readability formulas in accounting research and could be used in substitution of the original metrics in future studies. An econometric model was used that presents the determinants of readability. Readability was calculated for the Results Analysis section of the Management Report. The resulting construct is understood via three attributes: persistence, current performance, and the reference benchmark. Harmonization with IFRS is a dummy variable, which delimits the pre- and post-IFRS periods. The hypotheses were tested in a sample of Brazilian companies made up of 714 company-year observations covering the period from 2006 to 2019. The descriptive results show that there is an apparent improvement in the readability of the reports in the pre- and post-IFRS period comparison. The econometric evidence shows that, in general, companies with persistent and positive earnings present less complex reports and are more likely to have highly readable reports, because managers publish reports with better readability to signal positive results to the market.

Multi-level Video Captioning based on Label Classification using Machine Learning Techniques

Video captioning is the heuristic and most essential task in the current world to save time by converting long and highly content-rich videos into simple and readable reports in text form. It is narrating the events happening in videos in natural language sentences. It makes the way to many more interesting tasks by the use of labels, tags, and terms such as video content retrieval, video search, video tagging, etc. Video captioning is currently being attempted by many researchers using some exciting Deep learning techniques. But this approach is to find the best of machine learning for the process of captioning videos in a different way. The novel part of the proposed approach is classifying videos by using the labels existing in video frames that belong to the various categories and producing consecutive Multi-Level captions that describe the entire video in a round-robin way. Informative features are extracted from the video frames such as Gray Level Co-occurrence Matrix (GLCM) features, Hu moments, and Statistical features to provide optimal results. This model is designed with two superior and optimal classifiers such as Support Vector Machine (SVM) and Naive Bayes separately. The models are demonstrated with the prevailing standard dataset Microsoft Research Video Description corpus (MSVD) and evaluated by the benchmark classification metrics such as Accuracy, Precision, Recall, and F1-Score.

VirusLab: A Tool for Customized SARS-CoV-2 Data Analysis.

Since the beginning of 2020, the COVID-19 pandemic has posed unprecedented challenges to viral data analysis and connected host disease diagnostic methods. We propose VirusLab, a flexible system for analysing SARS-CoV-2 viral sequences and relating them to metadata or clinical information about the host. VirusLab capitalizes on two existing resources: ViruSurf, a database of public SARS-CoV-2 sequences supporting metadata-driven search, and VirusViz, a tool for visual analysis of search results. VirusLab is designed for taking advantage of these resources within a server-side architecture that: (i) covers pipelines based on approaches already in use (ARTIC, Galaxy) but entirely cutomizable upon user request; (ii) predigests analysis of raw sequencing data from different platforms (Oxford Nanopore and Illumina); (iii) gives access to public archives datasets; (iv) supplies user-friendly reporting – making it a tool that can also be integrated into a business environment. VirusLab can be installed and hosted within the premises of any organization where information about SARS-CoV-2 sequences can be safely integrated with information about hosts (e.g., clinical metadata). A system such as VirusLab is not currently available in the landscape of similar providers: our results show that VirusLab is a powerful tool to generate tabular/graphical and machine readable reports that can be integrated in more complex pipelines. We foresee that the proposed system can support many research-oriented and therapeutic scenarios within hospitals or the tracing of viral sequences and their mutational processes within organizations for viral surveillance.

The readability of 10-K reports and insider trading profitability

This study links the readability of 10-K reports to insider trading profitability. Using a sample of 102,060 insider transactions in the United States between 1994 and 2016, we empirically demonstrate that less readable 10-K reports increase profitability from insider trading. Consistent with the proprietary cost argument, we also document that readability impacts on insider trading profitability are more pronounced for research and development–intensive firms, for firms facing higher product market competition and trade secrecy, and for firms with lower levels of voluntary management disclosures. Overall, this study supports the proprietary cost and strategic information asymmetry channel of readability and suggests that less readable reports lead to the exploitation of information advantages by insiders. JEL Classification: D4, G14, G34, G40

Political corruption and annual report readability: evidence from the United States

This study examines the association between the political corruption of a local government and the readability of firms’ annual reports. Based on a sample of 12,742 firm-year observations during the 2006–2014 period, the study reveals that firms located in more corrupt regions tend to disclose less readable financial reports. Our additional analyses reveal that the level of annual report readability is lower for firms located in more corrupt regions, regardless of the firms’ level of return on assets. We also find that firms located in more corrupt regions and having more able managers are more likely to obfuscate information in annual reports. The results imply firms’ effort to minimise rent extraction from corrupt government officials. A further test shows that firms in more corrupt regions are more likely to report less readable Management Discussion and Analysis (MD&A) section of annual reports. This paper extends the prior literature on annual report readability and political corruption. The paper also provides additional evidence to the mixed results on the management's obfuscation behaviour related to the readability of financial disclosures. The findings may be of interest to regulators seeking out factors influencing firms’ readability of annual reports.

Readability of Operational Risk Disclosures of Banks

Abstract Operational risk has been acknowledged as a major source of material failures in financial firms. Despite the increased concern of financial institutions and their stakeholders on this topic, the literature that deals specifically with the operational risk disclosure in the banking system is scarce. The present research investigates the readability in transparency reports of Romanian banks, and focuses in particular on the operational risk disclosures. The sample consists of 13 commercial banks operating in Romania in 2017. A concise transparency report is characterized by clarity in the expression of concepts, usage of as few words as possible, limited use of technical terms and avoidance of highly generic disclosures. Drawing upon prior research, we expect that banks with lower levels of performance are foggier (i.e. less concise) in order to improve the image resulting from their transparency reports. Additionally, it is expected that the longer an entity has been established, the higher the quality of disclosures, thus the transparency reports of older banks are more concise compared to the recently established banks. Moreover, we posit that larger banks are more likely to provide more readable reports. The research is part of the larger debate related to disclosure and its various impacts on both the recipient and the giver of information. The main contribution is the innovative approach consisting in the textual analysis of transparency risk reports. To the best of our knowledge, we are not aware of any study that examined conciseness in the setting of operational risk disclosure by banks.

Financial report readability and audit fees: a simultaneous equation approach

PurposeThis paper aims to investigate whether audit fees and financial report readability are bi-directionally related.Design/methodology/approachThe authors test their hypotheses with empirical data. Specifically, they adopt a two-stage simultaneous equation regression model to assess the bi-directional relationship between audit fees and financial report readability.FindingsWhile poor readability increases the fees charged by the auditor, higher audit fees improve the readability of the financial reports.Research limitations/implicationsThis study is based on US data. Future research may extend this study to other countries.Practical implicationsPoor financial report readability encumbers stakeholders of the firms. Understanding the interaction between financial report readability and audit fees will help both auditors and firm managers.Social implicationsAudit committees aggressively negotiating for lower audit fees should be aware of the link of low audit fees, potentially indicative of poor quality, to less readable reports. Investors and regulators too should be concerned about this relationship, especially in instances when auditors low-ball audit fees or when firms aggressively negotiate for lower audit fees.Originality/valueTo the best of authors’ knowledge, this study is the first to document the bi-directional relationship between financial report readability and audit fees and assess the positive impact of audit fees on financial report readability.

Financial report readability and stock return synchronicity

ABSTRACTIn this study, we investigate the impact of firm-specific information-processing cost, proxied by annual report readability, on investors’ firm-specific information usage, proxied by firm stock return synchronicity. We expect that more readable financial reports would reduce firm-specific information-processing costs and, therefore, reduce stock return synchronicity. We propose a new readability measure and demonstrate that, as the readability of annual reports increases, the firm’s future stock return synchronicity decreases. Furthermore, the effect of report readability on stock return synchronicity is more concentrated on firms with low analyst coverage or institutional ownership. Finally, the impact of readability on stock synchronicity is more concentrated on firms with high information asymmetry, such as firms small in size, with high R&D spending, or with high growth. The benefit of incorporating more firm-specific information (e.g. from a more readable financial report) into stock price is consistent with the SECs continuous attempt to make public company reports easier to comprehend. Managers of publicly listed firms should be aware of such a benefit and make their financial reports more readable by incorporating more tables, especially when their firms face high information asymmetry.

The Costs and Benefits of Reducing Complex Disclosures

Purpose: Reducing annual report disclosure complexity has been a topic of serious debate for standard setters in recent years. In response to that, this study seeks to explore the effect of reducing such complexity on ERC, agency costs, proprietary costs, as well as interest rates on loans given by banks. Methodology: Based on listed companies in Indonesia for the year 2016, required data is collected through the IDX website. All empirical results in this study are obtained through the IBM SPSS Statistics software version 23 using the linear regression function for each hypothesis. Findings: The overall empirical results show that: 1) ERC and proprietary cost is not significantly affected by fog index, suggesting a less effective capital market in Indonesia, where information is not immediately processed in the market; 2) Agency costs are inversely related to disclosure complexity, suggesting that firms producing simpler reports are either mostly involved in tax planning, or larger Indonesian firms with lower fog usually bear higher monitoring costs; and 3) Interest rates on loans given by banks are greatly affected by disclosure complexity. Firms with more complex reports tend to get lower rates on bank loans as compared to those with much more readable reports, suggesting that providing debtholders with more complex information actually reassure them to offer lower rates. Originality: This paper is the first to explore the costs and benefits of reducing disclosure complexity in Indonesia.

Quality Assessment of Reporting Performance for EGFR Molecular Diagnosis in Non-Small Cell Lung Cancer.

Reports serve as a bridge between laboratories and clinicians, help synthesize an overwhelming amount of raw data into evidence-based medicine, and play a significant role in designing clinical treatments. In an effort to guarantee high-quality epidermal growth factor receptor (EGFR) gene mutation testing and reporting performance, the National Center for Clinical Laboratories launched a proficiency testing (PT) scheme reflecting clinical practices in China since 2014. This study focuses on the quality assessment of gene mutation reports. Fifty-three laboratories that submitted reports in both 2014 and 2016 EGFR gene mutation PT schemes were selected for report analysis and comparison according to predefined evaluation criteria. The average score for reports from 2014 was 14 out of 30 points. The overall scores for reports from 2016 improved substantially, yielding an average score of 20 out of 30 points. Among the evaluation criteria, general items were well documented in the reports. However, items specific to molecular diagnosis were far from satisfactory, and some items were even missing. The quality assessment of clinical written reports from 2014 and 2016 demonstrates that substantial improvements have been made in overall reporting performance. However, not all statements pertaining to important elements met expectations. To continue education, repeated PT schemes need to be executed in a timely fashion to expose and address existing shortcomings in clinical reports. There remains ample room for improvement towards generating concise, comprehensive, and readable reports. This article compares the quality of clinical gene mutation reports submitted in 2014 to those submitted in 2016 epidermal growth factor receptor proficiency testing schemes, exposes the existing shortcomings, and discusses ways to communicate results more effectively in the future. The findings demonstrate that notable progress was observed in the overall reporting performance. However, key points specific to molecular diagnosis were far from expectation, and some items were even missing. Standardization needs to be emphasized to improve the report format and content. This article provides a reference that laboratories can use to write concise, comprehensive, and readily accessible clinical reports.

Earnings Management and Social Capital

I examine social capital’s impact on financial reports. Based on the social capital literature, I predict that the quality of the financial reports is higher when a firm is headquartered in a region with high social capital. Consistent with this prediction, I find that the firms that are headquartered in this type of region in the USA have a lower probability of committing fraud by misrepresenting financial information. Further, I find that the firms in regions with high social capital have lower levels of discretionary accruals and much more readable annual reports.

How Readable are SOX 404 Reports? An Application of Textual Analysis

This study examines all SOX 404 reports issued between 2004 and 2014 to determine their readability as measured by the FOG index after controlling for report size. We find that managements' reports are more readable than auditors' reports. Big 6 reports are less readable than non-Big 6 reports. Among the Big 4 firms, two firms issued significantly more readable reports than the others. The readability of managements' reports decreased after Auditing Standard (AS) No. 5 (PCAOB 2007) was issued whereas the readability of auditors' reports did not change. Reports containing three or more weaknesses (implying entity level control weaknesses) are significantly more readable than other reports.

Analyst Report Readability and Stock Returns

AbstractThis study investigates the market's response to analyst report readability. We posit that readable reports decrease uncertainty of earnings expectations and by extension increase stock prices. Our results show that the equity market reacts more positively to readable reports and that this positive reaction is attributable to a reduction in uncertainty of future performance. Moreover, we find that the effect of readability on stock prices is significantly positive only for firms with greater R&D spending, higher bid‐ask spreads, a greater proportion of uninformed investors, and more experienced analysts, which suggests that readability matters only when information asymmetry in the equity market is high.

The Readability of 10-K Reports and Stock Price Crash Risk

This paper shows that less readable 10-K reports predict higher stock price crash risk. Using stock price crash risk or, more generally, the third moment of stock return distribution as a powerful indicator of managerial bad news hoarding, our results strongly support the prediction that managers can successfully hide adverse information and boost current stock prices by writing more complex financial reports. Additional analyses show that the effect of financial reporting complexity on crash risk is more pronounced for firms with (persistent) negative earnings news or with transitory positive earnings news, for firms with greater CEO stock option incentive, and for firms with lower litigation risk. We also find that the passage of the Sarbanes–Oxley Act (SOX) does not mitigate the relation between financial reporting complexity and crash risk. Moreover, it appears that textual obfuscation is more significant than earnings management in determining crash risk in the post-SOX era. Finally, firms with less readable financial reports experience sharper price drops during the 2007–2008 financial crisis.

Analyst Report Readability, Earnings Uncertainty and Stock Returns

This study investigates the association among readability of analyst reports, stock prices, and expectations of future earnings. Readability is one important feature of analyst reports that may affect value-relevant information. We find that analyst report readability reduces forecast dispersion but is not associated with revision news, and that market reactions are significantly positive towards more readable reports. In addition, we document that the market reacts positively to the reduction of forecast dispersion predicted by report readability. Finally, the positive effect of readability on stock prices is higher when it effectively reduces investors’ costs to process analyst report information, specifically when forecasting firms have more R&D spending, when transaction costs are higher, when analysts are more experienced, or when forecasts are issued after earnings announcements. Overall, our empirical findings suggest that the writing of analysts’ reports reduces uncertainty about future earnings, and investors price that reduction of uncertainty. This contributes to the understanding of the role of analysts as information intermediaries for investors.

Analyst Report Readability

This paper studies three research questions: (1) whether readability of analyst reports affects investment decisions; (2) whether the way analysts explain the reasoning of their research relates to accuracy of earnings forecasts; and (3) whether readability of analyst reports relates to the underlying characteristics of the analysts. We find that the market reacts more favorably to reports with upward revisions and are easier to read. Upward revisions have smaller forecast errors in relatively more readable reports. We also find that upward revision reports issued by analysts from smaller brokerage houses and analysts having better records of forecast accuracy are more readable.