Accounting executives and readability of 10-K reports

This study investigates how the presence of accounting executives is related to the readability of narratives in 10-K reports. We find that companies with accounting executives tend to prepare more readable 10-K reports than those without. Furthermore, we document that the higher the accounting executives’ positions within the executive group hierarchy, the better the readability of the 10-K reports. Overall, findings suggest that the accounting executives’ characteristic of pursuing precise information explains the information delivery pattern of 10-K reports. The results expand two strands of literature: one for the determinants of 10-K readability and the other for the role of the accounting profession in the executive team.