INTELLIGIBILITY VS READABILITY: UNDERSTANDABILITY MEASURES OF FINANCIAL INFORMATION

Decision-making is influenced by information, which must be understood so it can useful. However, measuring understandability not a simple task. Previous studies use readability metrics as proxies for understandability, but shallow metric ignoring discourse and language components. This research analyzes the notes to financial statements using intelligibility metrics, an alternative measures. Our sample comprised 44 Brazilian firms that presented their Portuguese (native language) English (non-native) from 2012 2015. Focusing on of Financial Instruments Provisions, we found that, most indexes where had worse levels, they showed better levels. It indicates both measure different things. results also indicated impacts these did improve information quality after guideline OCPC 07 Accounting Standards Committee.