Complex information and accounting standards: Evidence from UK narrative reporting

The application of International Financial Reporting Standards (IFRS) has been introduced in many countries to enhance efficiencies financial markets and improve communication reporting. However, extant studies have suggested that the introduction IFRS increased narrative complexity, owing demand for more Considering accounting complexity can be either informative (enhancing understanding) or non-informative, thereby causing obfuscation, this study performs an empirical analysis highlight which two types complexities may affected by application. Using setting adoption UK a word list-adjusted component fog index, decomposes into components: information (common complexity) obfuscation (uncommon complexity). results reveal common narratives (information) but does not necessarily increase obfuscation. study’s contribution is twofold: methodological through decomposition using term weighting concept policy-related identifying areas comparability reports. Moreover, novel. Future apply identified components investigate economic consequences IFRS-associated complexity.