The first enhancing qualitative characteristic, understandability, will increase when information is classified, characterized, and presented clearly and concisely. Understandability is referred to, when the quality of information enables users to comprehend their meaning (IASB, 2008). Understandability is measured using five items that emphasize the transparency and clearness of the information presented in annual reports (Jonas & Blanchet, 2000; Iu & Clowes, 2004; Courtis, 2005; IASB, 2006).
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