Public Attention And Readability Of Annual Report

The annual report is an important channel for the company to communicate with its internal and external stakeholders,and it plays an extremely important role in the market.In traditional research,scholars have mostly carried out research on the financial information in the company’s annual report,but less research on textual information.With the development of computer technology and the gradual maturity of text analysis technology,the text part of the non-financial information in the annual report has also caused a research boom.The inclusion of the rich on the 100 Rich List puts the rich company on the "star halo".When the company receives great attention from the society,the annual report is an important channel for listed companies to transmit information to the public.What kind of strategic disclosure will the company adopt What are the factors that have an impact on the readability of the annual report?This is worthy of our in-depth study.However,most of the measurement indicators of readability have evolved from the study of English texts.There are large differences between Chinese and English texts.How to transform such commonly used indicators to better apply to readability studies in the domestic market is of public concern.Whether the increase in degree will have a greater impact on the readability of the company’s annual report is yet to be known.Therefore,this article takes this as an entry point.First,it analyzes the annual reports of my country’s Shanghai and Shenzhen A-share listed companies,tries to propose readability indicators that can be applied to the domestic market,and then explores the readability of the annual reports of their affiliates after the rich are on the list.Change and its impact mechanism.This article selects all listed companies in Shanghai and Shenzhen A shares from2007 to 2019 as the research sample,and sorts out the list of the "Hurun Report" from2008 to 2018.Based on this,we count the wealthy companies that made the list for the first time each year.This exogenous event is used to explore the impact of public attention on the readability of annual reports.This paper conducts an empirical analysis through the Difference-in-Differences model and draws the following conclusions: First,the increase in public attention will reduce the readability of the company’s annual report,that is,after the company’s actual controller is on the list,the company will choose to lower the annual report in order to avoid negative information.Readability;Second,the internal characteristics of the company will affect the selection of the annual report disclosure strategy of the rich company.Specific research has found that companies with poor internal control quality and high earnings management will increase the negative effect of public attention on the readability of the annual report;Third,the external governance of the company will affect the choice of the rich company’s annual report disclosure strategy.The specific research found that institutional investors hold a low proportion of shares and companies that are not audited by the Big Four can increase the public’s attention to the negative impact on the readability of the annual report.To effect.From the research results,the increase in public attention has a certain impact on the company’s choice of annual report disclosure strategy.In particular,the public’s negative attention to the wealth accumulation process of rich companies has increased the pressure on the company’s management and faced a large amount of negative information.At times,companies choose to avoid negative information to avoid higher political costs.This puts forward requirements for my country’s capital market to strengthen information disclosure regulations and enhance the effectiveness of supervision.The innovations of this article are as follows: First,the method of measuring the readability of Chinese annual reports has been optimized.Based on previous studies,the fog index,AR index and FK index have been adjusted using computer technology to make it compatible with the Chinese text.The measurement of information is more scientific and standardized;second,the influencing factors of annual report readability research have been expanded.The current research on readability is more about the company’s external events,and the research on public attention and annual report readability Not much;thirdly,this article introduces the two major factors of the company’s internal characteristics and the company’s external governance,and in-depth description of the mechanism channels through which public attention affects the readability of the annual report.