British Accounting Review (1996) 28, 139–154 THE INFLUENCE OF COGNITIVE STYLE ON THE UNDERSTANDABILITY OF A PROFESSIONAL ACCOUNTING PRONOUNCEMENT BY ACCOUNTING STUDENTS CHRIS PATEL M acquarie University, A ustralia RON DAY The University of N ewcastle, Australia The Cloze test has been used extensively in accounting research to measure un- derstandabilityofaccounting reports, textbooks and pronouncements. Although useful, previous research has generally been limited to using the output from Cloze tests as measures of understandability. Little attempt has been made to look into the black box of human information processing to identify individual psychological differences that may influence understandability scores. This study extends the research into this area and provides insight into the black box by investigating the interaction between cognitive styles and understandability, within the context of an Australian accounting pronouncement. Specifically, this paper develops and tests the hypothesis that field independent subjects should obtain significantly higher understandability scores as measured by the Cloze test. A secondary objective is to provide empirical evidence on the understandability of Statement of Accounting Concept No. 4: ‘Definition and Recognition of the Elements of Financial Statements’ (SAC 4), given the importance of this pronouncement to the development of the conceptual framework project in Australia and the controversial claims of its lack of understandability.  1996 Academic Press Limited INTRODUCTION Communication has long been recognized as a basic function of financial reporting (Littleton & Zimmermann, 1962; Norton, Bedford & Baladouni, We would like to acknowledge the useful comments of an anonymous reviewer and the associate editor, Dr Lydia Thomson. Correspondence should be addressed to: Chris Patel, Department ofAccounting &Finance, Macquarie University, NSW, 2109, Australia; or Ron Day, Department of Commerce, The University of Newcastle, NSW, 2308, Australia. Received 30 January 1995; revised 29 May 1995; accepted 10 July 1995 0890–8389/96/020139+16 $18.00  1996 Academic Press Limited