mohamad reaza abbaszadeh; Mahdi Salehi; farhad nasimtoosi
Abstract
Readability is the ease with which a reader can understand a written text. Audit report is a message about validity of financial statements that auditors transmit to the users. It is expected that the readability of the audit report plays an important role in understanding it by users. Therefore, the ...
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Readability is the ease with which a reader can understand a written text. Audit report is a message about validity of financial statements that auditors transmit to the users. It is expected that the readability of the audit report plays an important role in understanding it by users. Therefore, the present paper aims to examine the factors affecting on readability of the audit report. To this end, the readability of 1202 audit reports belong to 2011 to 2016 (after revision in the Audit Standard 700 on 2011), using Gunning Fog Index is measured, Then the impact of the auditor's characteristics and Client's characteristics on Audit report Readability by Fuzzy Decision Tree, Ancova And step-by-step regression is studied. The results showed that, firstly, the readability of the audit reports varies with each other. Secondly, the readability of the audit reports is influenced by the auditor's characteristics and Client's characteristics. Third, most important variables determining readability of the audit report are the Auditor's Size (negative effect), auditing consolidted/not consolidted financial Statement (Consolidated one is less readable), size of the Client (negative effect), ratio of market to book value of Client (Positive effect) and Auditor's Report Type (adjusted report is less Readable). Fourth, audit report delay will reduce readability.
