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Purpose of this paper: The purpose of this paper is to investigate the impact of the readability and complexity levels of financial disclosures on naive investors’ willingness to invest and their stock valuation judgements. Design/methodology/approach: Two experiments were conducted during the study. The first experiment is a between subject experimental design and is conducted to investigate the impact of different readability levels (less readable Vs more readable) on naive investors’ investment judgements. The second experiment is a within subject experimental design and is conducted to test the impact of different complexity levels (more complex Vs less complex) on naive investors’ judgements. Non-parametric statistical tests were used to test the research hypotheses. Findings: The impact of readability level on investors’ comfort and willingness to invest was clear and significant in the case of more complex negative information (options case) as investors’ willingness to invest was lower in case of more readable negative information on options, but that was not the result in case of the less complex negative information (convertible bonds case). Readability levels affected investors’ stock valuation whether the information presented is less complex or more complex. Investors’ stock valuation was lower in case of less readable information than that in the case of more readable information. As for the impact of complexity, the results didn’t show significant impact of the complexity levels on the investors’ willingness to invest and their stock valuation. Research limitations/implications: This paper uses undergraduate students registered in the English section in the faculty of commerce of Alexandria University as a proxy for naive investors. Those students passed three courses of accounting and have basic knowledge in financial disclosures. Real investors were difficult to recruit as subjects for the experiment conducted. Social and Practical implications: The results of the study imply that different readability levels can have a significant impact on investors’ willingness to invest in case the information presented is more complex and their stock valuation, whether the information presented is less complex or more complex. What is original/value of paper? This paper is the first to examine the impact of readability and complexity separately. The paper contributes to the existing literature examining the readability and complexity of financial disclosures on investors’ decisions and judgements."

Purpose of this paper: The purpose of this paper is to investigate non-professional investors’ perceptions of audit quality proxied by audit firm size on their desirability to invest and their estimates of firm value. Design/methodology/approach: Two within-subjects experiments were designed to test non-professional investors’ perception regarding the impact of audit quality on their desirability to invest and their estimates of firm value in a single audit scenario and a joint audit scenario. Non-parametric statistical tests were used to test the research hypotheses. Findings: In a single audit scenario, investors perceive a superior quality for the audit services provided by a big 4 versus a non-big 4. In the case of a joint audit, the Accountability State Authority does not have the same superiority of audit quality versus a big 4 firm when it comes to Egyptian non-professional investors’ perception for the audit quality provided. Research limitations/implications: This paper uses postgraduate students that are registered in the financial accounting and auditing diploma in the faculty of commerce– Alexandria University as a proxy for non-professional investors. Real investors were difficult to recruit as subjects for the experiment conducted. Social and practical implications: The results of the study imply a lower non-professional investors’ perception for the quality of the audit services provided by the governmental body in Egypt, which is responsible for auditing all financial matters for governmental units. This result is alarming and needs immediate attention from the governmental bodies in Egypt. What is original/value of paper? This paper is the first to examine the impact of audit quality on nonprofessional investors’ desirability to invest and their estimates of firm value in Egypt. The paper focuses on the audit quality of the Accountability State Authority in comparison with that of the Big 4 firms, which was not examined before in Egypt. The paper contributes to the existing literature examining audit quality services in emerging markets.

No Abstract. African Journal of Urology Vol. 12 (3) 2006: 141-143