Purpose

This study aims to mainly explore the impact of business strategy and annual reports readability on financial reporting quality in Tehran Stock Exchange (TSE).

Design/methodology/approach

The sample comprised 160 companies listed in TSE from 2014 to 2020. Five proxies (including two accounting-based attributes and two market-based attributes) were used to measure financial reporting quality. In this study, cost leadership and differentiation strategies were considered and Fog index was used to measure the annual report readability.

Findings

The results showed that in all methods of calculating financial reporting quality, cost leadership strategy, differentiation strategy and annual report readability had a positive and significant impact on financial reporting quality. Also, only at the high level of the differentiation strategy, the annual reports readability influenced financial reporting quality. In addition, at all levels of high and low annual report readability, cost leadership strategy affected financial reporting quality, but only in companies with a high annual report readability, the differentiation strategy affected financial reporting quality. Only for companies with a low readability, the annual report readability affected financial reporting quality.

Originality/value

To the best of the authors’ knowledge, no study had examined the impact of business strategy and annual report readability on financial reporting quality at the core of the present study. Furthermore, little was known about the strategic choices made in Iran. So, the research filled this gap in TSE. This study provided insights for policymakers to enhance the readability and reduce the complexity of annual reports.

中文翻译：

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业务战略和年报可读性对财务报告质量的影响

目的

本研究旨在主要探讨业务战略和年度报告可读性对德黑兰证券交易所 (TSE) 财务报告质量的影响。

设计/方法/途径

样本包括 2014 年至 2020 年在东京证券交易所上市的 160 家公司。使用五个代理变量（包括两个基于会计的属性和两个基于市场的属性）来衡量财务报告质量。本研究综合考虑成本领先和差异化战略，采用雾指数衡量年报可读性。

发现

结果表明，在所有测算财务报告质量的方法中，成本领先战略、差异化战略和年报可读性对财务报告质量产生了显着的正向影响。此外，只有在差异化战略的高层，年报的可读性才会影响财务报告的质量。此外，在高、低年报可读性的各个层面，成本领先战略影响财务报告质量，但仅在年报可读性高的公司，差异化战略影响财务报告质量。只有可读性较低的公司，年报可读性影响财务报告质量。

原创性/价值

据作者所知，目前还没有研究考察商业战略和年度报告可读性对财务报告质量的影响，这是本研究的核心。此外，人们对伊朗做出的战略选择知之甚少。因此，该研究填补了 TSE 的这一空白。这项研究为政策制定者提供了见解，以提高年度报告的可读性并降低其复杂性。