Using a sample of the listed firms over the period 2007–2019, we examine the impact of financial statement readability on the earnings management in a large emerging economy, India. Besides, we test for the readability of financially distressed and financially constrained firms. We use the fog index to measure the readability of the Management Discussion and Analysis (MDA) section of the annual report, and earnings management is measured using the Jones model. Our results indicate that the firms practicing earning management activities prepare lesser readable financial reports. Our results remain the same after adding the firm-fixed effect to control for firm-specific characteristics. Thus, more financial manipulation practices by the firm make the financial reports more complex to comprehend.

中文翻译：

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盈余管理实践是否定义了印度财务报告的可读性？

我们使用 2007 年至 2019 年期间的上市公司样本，研究了财务报表可读性对大型新兴经济体印度盈余管理的影响。此外，我们测试了财务困难和财务受限公司的可读性。我们使用迷雾指数衡量年报管理层讨论与分析（MDA）部分的可读性，盈余管理采用琼斯模型衡量。我们的结果表明，从事盈余管理活动的公司编制的财务报告可读性较差。在添加公司固定效应以控制公司特定特征后，我们的结果保持不变。因此，公司更多的财务操纵行为使财务报告更难以理解。