How do auditors respond to low annual report readability?

Belen Blanco, Paul Coram, Sandip Dhole, Pamela Kent

Research output: Contribution to journalArticleResearchpeer-review

27 Citations (Scopus)


We show that increased audit effort is associated with lower annual report readability to compensate for a perceived increase in the risk of financial misstatement for United States (US) firms. In particular, we find that lower annual report readability is associated with longer audit delays and higher audit fees for Form 10-K for US auditors, suggesting that auditors spend more effort auditing clients when annual reports have lower readability. We also find that low readability increases the likelihood of auditors using more explanatory language in unqualified audit reports.

Original languageEnglish
Article number106769
Number of pages14
JournalJournal of Accounting and Public Policy
Issue number3
Publication statusPublished - May 2021


  • Audit fees
  • Audit report lag
  • Readability
  • Unqualified audit reports with additional language

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