Readability and Corporate Annual Reports.

Abstract A problem, which has been of concern to the accountant and other interested people for a good number of years, is the construction of the corporate annual report. It is generally conceded that one of the objectives in constructing the annual report is to make it as readable and understandable as possible. Because of continuing interest through the years in improving the readability of corporate annual reports, it seems to be generally believed that corporate annual reports are improving over time and that they are currently easier to read and more understandable than they once were. The article was designed to achieve three objectives. The first was to make an evaluation of the reading ease of selected corporate annual reports for the year 1961. The second objective was to evaluate the validity of the reading ease scores as determined by the new Flesch readability formulas. This evaluation is based upon the results of reading ease rankings by independent judges. The third objective was to evaluate the correlation between reading ease scores and the level of comprehension of test material by independent judges.