Defining and measuring readability in the context of financial disclosures becomes important with the increasing use of textual analysis and the SEC's plain English initiative. We propose defining readability as the effective communication of valuation relevant information. The Fog Index — the...

In business research, firm size is both ubiquitous and readily measured. In contrast, complexity, another firm-related construct, is frequently relevant, but difficult to measure and not well defined. As a result, complexity is seldom incorporated in empirical designs. Measures such as the...