Assistant Professor of Accounting, Faculty of Economics and Management, Payame University
10.22051/jera.2024.45479.3180
Abstract
This research seeks to trace the effect of financial statement readability on the speed of companies' credit adjustments. To achieve the research goals, we collected a sample of 135 companies. They were on the stock exchange and picked by a pattern of systematic exclusion. The sample covers a period of 13 years, from 2010 to 2022. To test the hypotheses, a GMM multivariate regression model was used. To measure the speed of trade credit adjustment, I used a model by Lu (2022) and Aflatooni et al. (2022). To measure the readability of financial statements, I used the Fog index. The test found that, in the sample, firms can close 70% of the gap to optimal credit each year. Also, the readability of financial statements affects the speed of adjusting commercial credit. Improving this will speed up companies' efforts to achieve optimal credit. The research shows that simpler financial statements can help credit users and suppliers. It can speed up commercial credit adjustments to reach the target
Fathe, M. H. (2024). The Impact of Readability of Financial Statements on the Speed of Adjustment of Commercial Credit of Companies. Empirical Research in Accounting, 14(2), 155-178. doi: 10.22051/jera.2024.45479.3180
MLA
Mohamad hosein Fathe. "The Impact of Readability of Financial Statements on the Speed of Adjustment of Commercial Credit of Companies". Empirical Research in Accounting, 14, 2, 2024, 155-178. doi: 10.22051/jera.2024.45479.3180
HARVARD
Fathe, M. H. (2024). 'The Impact of Readability of Financial Statements on the Speed of Adjustment of Commercial Credit of Companies', Empirical Research in Accounting, 14(2), pp. 155-178. doi: 10.22051/jera.2024.45479.3180
VANCOUVER
Fathe, M. H. The Impact of Readability of Financial Statements on the Speed of Adjustment of Commercial Credit of Companies. Empirical Research in Accounting, 2024; 14(2): 155-178. doi: 10.22051/jera.2024.45479.3180
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