Quarterly Studies in Banking Management and Islamic Banking

The Relationship Between the Readability of Annual Reports and Bank Risk-Taking

Document Type : Original Article

Authors

soheila Askari Hassanabadi 1
hamid birjandi 2
Zahra Fathi 3
mina ahmadi 4

1 Assistant Professor, Accounting Department, Darab Branch, Islamic Azad University, Darab, Iran

2 PhD in Accounting, Kerman Branch, Islamic Azad University, Kerman, Iran

3 PhD Graduate, Accounting, Faculty of Management and Economics, Shahid Bahonar University of Kerman, Iran

4 Master of Accounting, Fasa Branch, Islamic Azad University, Fasa, Iran,

https://doi.org/10.22034/jifb.2025.505287.1603
Abstract
The readability of texts should align with the comprehension level and abilities of their intended audience. To date, various metrics have been developed to measure text readability, utilizing indicators such as the number of sentences, words, characters, syllables per word, and other linguistic features to assess text complexity. On the other hand, risk is recognized as an inherent element in the financial activities of banks in Iran, and today, the management of operational risks in financial institutions holds particular importance. This study investigates the relationship between the readability of annual reports and the level of risk-taking in banks listed on the Tehran Stock Exchange. The statistical population of this research includes 27 active banks on the Tehran Stock Exchange that have operated continuously over a 6-year period (2017–2023). The research method employed is multivariate regression, and Eviews version 11 software was used for data analysis and hypothesis testing.
The findings of the study reveal a positive and significant relationship between the readability of annual reports and the level of bank risk-taking. In other words, an increase in the readability of annual reports is associated with higher bank risk-taking. These findings highlight the importance of focusing on the quality and readability of financial reports in risk management and strategic decision-making within banks

Keywords

Readability of Annual Reports
Risk-Taking
Banks Listed on the Tehran Stock Exchange
Quarterly Studies in Banking Management and Islamic Banking
Volume 11, Issue 30
Summer 2025
Pages 118-139

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