Employee treatment and annual report readability

Abstract

Purpose

In this study, we examine the relation between employee treatment and annual report readability, which is measured as a reading difficulty score.

Design/methodology/approach

We use regression analysis to explore the impact of employee treatment on annual report reading difficulty.

Findings

We find a significant negative relation between employee treatment and reading difficulty, which suggests that annual reports of firms with better employee treatment are easier to read and understand (i.e. more readable).

Originality/value

Our study contributes to a more thorough knowledge of annual report readability and our findings may be of relevance to accounting standard setters and investors.

Citation

Murphy, B., Sun, L. and Wang, M.(V). (2024), "Employee treatment and annual report readability", International Journal of Managerial Finance, Vol. 20 No. 5, pp. 1398-1423. https://doi.org/10.1108/IJMF-03-2023-0151