Data Standardization and Quality Degradation of Human-readable Data

Data standardization is a widely recommended solution to improving data quality. Despite the potential benefits, we examine if it has any unintended, especially undesirable, side effects on data quality. The eXtensible Business Reporting Language (XBRL) is an XML-based open standard that aims to facilitate the preparation, exchange and comparison of financial reports. Leveraging the unique opportunity created by the exogenous mandatory XBRL adoption enforced by the U.S. SEC, we use a difference-in-differences (DID) research design to establish the causal relationship between XBRL adoption and quality of HTML-formatted financial reports, an important source for investors and analysts to obtain firms’ financial information. Surprisingly, we find the mandatory XBRL adoption has degraded the quality of the adopting firms’ HTML-formatted financial reports, as measured by a number of data quality metrics, including spelling errors and readability. The U.S. SEC and adopting firms need design appropriate policies to minimize the undesirable side effects

XBRL technology adoption and consequences: A synthesis of theories and suggestions of future research

Research Question: This study is an appraisal of XBRL existing literature to find out what exists and what is lacking in the literature regarding the incentives of XBRL adoption, and its consequences. Motivation: The literature has not fully investigated the incentives of XBRL adoption and its consequences for the users of financial statements. The aim of this study is to synthesize current literature on XBRL adoption and its consequences. Idea: eXtensible Business Reporting Language (XBRL) is revolutionizing financial reporting on a global scale. It has the support of the world's most powerful institutions, including stock exchanges, central banks, standard setters, regulators, and other industry interests. It has attracted the attention of accounting researchers to better understand its influences on accounting and auditing professionals. Methodology: The current study uses qualitative research methods that includes a review and a synthesis of a variety of archival materials. Papers on XBRL are summarized under two main categories: incentives of XBRL adoption, and its consequences. Findings: The review suggests that the majority of publications are published in the second decade during 2011-2021 period. This result may imply that researchers try to give more answers for regulators, policy makers and standard-setters about issues related to the concrete implementation of XBRL in different contexts and countries. In addition, the current review notices that most of the previous studies that focus on the determinants of XBRL adoption are exploratory and use the qualitative method through surveys and/or interviews. While these studies extend our knowledge about the motivations that push towards the XBRL adoption, future studies could confirm these results with more objective measures. The current study notices that most prior studies focus on a single country, hence future research may use comparative analysis of XBRL adoption in different countries as it may offer a better understanding of the actual use of XBRL in diverse contexts. Further studies should consider emerging countries, and more particularly GCC countries, where XBRL technology adoption is mandatory and take into account the socio-economic culture of these countries. As a future direction, there is a need of investigation on the role of regulation in improving the use of XBRL and the extent of compliance with XBRL IFRS taxonomy. Future studies may also investigate the potential consequences of XBRL technology on financial reporting quality to give answers for standard-setters and policy makers. Contribution: Our research contributes to the existing literature by creating a foundational knowledge base that will be relevant to different stakeholders including, governments, practitioners, and researchers on the effects of implementing XBRL, as well as the relevance of such theories in explaining XBRL adoption

Twenty Years of XBRL: What We Know and Where We Are Going

Purpose This paper extends the knowledge of eXtensible Business Reporting Language (XBRL) to synthesize what twenty years of accounting and business literature on XBRL suggests about the effective improvement from its implementation in financial reporting. Design/methodology/approach A systematic literature review and bibliometric analysis of 142 articles resulted in the identification of five primary research streams: adoption issues; financial reporting; decision-making processes, market efficiency and corporate governance; audit and assurance issues; and non-financial reporting. Findings The results reveal a scarcity of studies devoted to explicating the consequences of XBRL implementation on financial reporting. Also, some papers’ results question the usefulness of the language on the decision-making process. The overall lack of literature concerning the impact of XBRL on financial statement preparers, especially with reference to SMEs, is evident. Moreover, the consequences on corporate governance choices and the relevant internal decision-making processes are rarely debated. Research limitations/implications The findings are useful for users of companies’ financial disclosure policies, particularly for regulators who manage XBRL implementation in countries where XBRL has not yet been adopted as well as for others working in specific areas of financial disclosure, such as non-financial reporting and public sector financial reporting. Originality/value This study differs from previous literature on XBRL as it focuses on a wider period of analysis and offers a unique methodology – combination of bibliometric and systematic review – as well as a business perspective for deepening XBRL

Financial Reporting Practices of Italian SMEs. Why Do They Disclose More?

From reporting periods ending on or after 31 December 2014, Italian unlisted companies filing their financial statements under the national GAAP have to deposit them to the Business Register in fully XBRL format. In particular, for companies submitting their financial statements in the abbreviated form, the mandatory taxonomy has offered the option to use in their notes also the tables of the standard one: this means that they can voluntarily provide more information than that normally required by the law. In this paper, we investigate this phenomenon focusing on its level and analyzing the variables explaining the reasons that push Italian SMEs to use, in their abbreviated financial statements, non compulsory tables that are proper of the standard ones. Based on a large sample of 8,738 elements, we report surprising results: more than 80% of the abbreviated financial statements include at least one table proper of the standard ones, while on average they include seven. In addition, when analyzing the determinants of this phenomenon we find that the only relevant variable explaining the number of optional tables included in the abbreviated financial statements is the software used for preparing them

Financial Reporting in XBRL. First Evidence on Financial Statement Notes of Italian Unlisted Companies

The new taxonomy 2014-11-17 mandates Italian unlisted companies to codify in XBRL also the notes to the financial statements. Building on previous literature, the aim of this study is to analyze the impact of mandatory XBRL extension to the financial statements notes on financial reporting quality of the Italian unlisted companies. We focus our analysis on the taxonomy usage and the customizations made by the filers. Our data represents the very first sample of Italian financial statements filed in fully XBRL format. Despite the significant changes affecting the process of financial statement preparation, we find that Italian unlisted companies have accepted and acknowledged the potential benefits and limits of the new taxonomy. When dividing the notes section between textual blocks and tables, we find a clear preference for the filers to use textual blocks for both, standard and abbreviated financial statements. Overall, we find that filers of both financial statement types use extensively the customizations offered by the taxonomy. Moreover, for the filers of abbreviated financial statements, we show that they tend to use not only more table customizations but also tables that are proper for the standard financial statements, thus offering higher voluntary disclosure

Applicability of Lotka’s Law in eXtensible Business Reporting Language (XBRL) Studies

The paper aims to present the research trend and to examine the validity of Lotka’s law and authorship distribution in the extensible business reporting language (XBRL) studies. Data were retrieved from the Scopus database as of April 2020. A total of 394 documents, with a total of 648 authors have been obtained. The scientific productivity of the articles has been examined using bibliometric analysis and applicability of Lotka’s law have been tested using Kolmogorov-Smirnov (K-S) statistics and Chi-square test. This study presents a global picture of the publication trends in XBRL and the authorship of the publications. The findings of the study expose that in the productivity distribution for authors on XBRL studies fit in the Lotka’s Law

Standard Business Reporting (SBR) Adoption in Australia, Critically Acclaimed, Box Office Flop: Constructivist and Ecological Rationalities in Information Systems (IS) Adoption

IS enables organizations to improve their productivity, streamline their business processes, and better understand the challenges and opportunities facing their business. These benefits can further accrue to individuals and organizations when they adopt and use the systems. While the benefits of IS are multifarious, IS adoption remains challenging. The far-reaching consequences of IS motivate research examining the antecedents of successful IS adoption both at individual and organizational levels. To examine the complexity of IS adoption, we undertook an interpretive case study of SBR adoption in Australia. We contend that SBR's context in Australia offers distinctive perspectives on the complexity of IS adoption. We found that IS adoption decisions can be based on both constructivist and ecological rationalities. Our findings can provide insight in improving understanding of the benefits of SBR and have implications for companies, regulators, standard setters, and the accounting profession, more generally

A Knowledge Development Perspective on Literature Reviews: Validation of a new Typology in the IS Field

Literature reviews (LRs) play an important role in developing domain knowledge in all fields. Yet, we observe insufficient insights into the activities with which LRs actually develop knowledge. To address this important gap, we 1) derive knowledge-building activities from the extant literature on LRs, 2) suggest a knowledge-based LR typology that complements existing typologies, and 3) apply the typology in an empirical study that explores how LRs with different goals and methodologies have contributed to knowledge development. In analyzing 240 LRs published in 40 renowned information systems (IS) journals between 2000 and 2014, we draw a detailed picture of knowledge development that one of the most important genres in the IS field has achieved. With this work, we help to unify extant LR conceptualizations by clarifying and illustrating how they apply different methodologies in a range of knowledge-building activities to achieve their goals with respect to theory

Business value of XBRL to the financial report receivers in Finland

Objectives of the Study The main objective of this study is to find out the factors that may affect the business value of the XBRL standard to the financial report receivers in Finland. The other objective is to explore the role of network effects in creation of the value to the financial report receivers. The study is exploratory, as the goal is to discover the potential business value of the technological standard that has not been widely implemented in Finland at the moment of writing this paper. This thesis sets the basis for the further studies on the business value of XBRL, if and when the standard is implemented in the case organizations. Academic background and methodology Academic background includes the theories of productivity paradox, network effects and various theories on a business value of IT. The theoretical framework is built on the TOE framework and on the model of sources of value creation in e-business. The methodology includes the collection of qualitative data through semi-structured face-to-face interviews with representatives of the case organizations and subsequent cross-case analysis. Findings and conclusions Findings confirm the proposition presented in the theoretical part of the thesis. Results also show that the most important environmental factor in the potential business value of XBRL at the moment is “network effects” as EU integration of public organizations deepens. Efficiency and interoperability were two business value components that have a potential of influencing companies to adopt XBRL and yield significant benefits from it. On the other side results reveal smaller significance of the factor of technology usage and the business value component of value-added services

Strategies to Reduce Excessive Transition Costs to the International Financial Reporting Standards

The excessive cost of the transitioning from the Generally Accepted Accounting Principles (GAAP) to the International Financial Reporting Standards (IFRS) is a vital business challenge. Based on the transaction cost economics (TCE) theory, the purpose of this qualitative single case study was to explore strategies that some of the organizational financial professionals use to minimize excessive transition costs from GAAP to IFRS accounting systems. Data were collected from 3 financial professionals of a corporation located in the west coast region of Northern California using semistructured interviews, besides reviewed public records, and studies of developed countries that adopted IFRS. Using the thematic analysis approach, 4 themes emerged, (a) strategic planning and strategy, (b) strategies formulation, implementation, and evaluation, (c) contract negotiation and enforcement, and (d) information system and project cost. The findings of this study could add practical knowledge of focused and consistent actions to IFRS adoption strategies, which could give priority to reducing the costs of the transaction from implementing GAAP to IFRS in local firms\u27 financial reporting. The implications for positive social changes could include the potential to enhance knowledge of financial reporting, motivate investments, increase economic resources, and improve local employment growth