Investigating the Effect of Economic and Accounting performance Criteria on the Readability of Financial Reporting Based on the Information Narrative Disclosure

Managers can deliberately reduce the narrative of information by complicating its readability, thereby reducing the transparency and understanding of financial statement users. Managers complicate the disclosure of information when they perform poorly. This study aims to investigate the effect of economic and accounting performance criteria on the readability of financial reporting. A sample of 152 companies listed on the Tehran Stock Exchange was selected by systematic elimination method from 2012 to 2021. In terms of purpose, this research is of applied type, and in terms of classification according to the method, it is of descriptive type and the method of data analysis is regression analysis and panel data method. The research results indicate that the economic criteria used in this research have a positive and significant effect on the readability of financial reports. Furthermore, accounting criteria such as return on assets and profit per share hurt the readability of financial reports, and return on equity positively affects the readability of financial reports. The test of combined market and accounting criteria, such as Q-Tobin and price-to-earnings, shows that these variables positively and significantly affect the readability of financial reports. According to the results of the research, we expect that the better performance of companies in the form of economic, accounting, and combined market-accounting variables will cause readability and transparency of information in financial reports and they will not have opportunistic behavior in presenting financial reports and facilitate decision making for investors