Title: Longitudinal analysis of voluntary adoption of XBRL on financial reporting

Authors: Jap Efendi, L. Murphy Smith, Jeffrey Wong

Addresses: Department of Accounting, University of Texas at Arlington, 701 S. West Street, Arlington, TX 76019, USA. ' Department of Accounting, Mays Business School, Texas A&M University, 4353 TAMU, College Station, TX 77843-4353, USA. ' Department of Accounting and Information Systems, College of Business Administration, University of Nevada, Reno, NV 89557-0026, USA

Abstract: In December 2008, the SEC approved final rules which require companies to submit financial statements in XBRL format with their SEC filings, beginning with quarterly June 2009 filings for the largest companies and within three years for all public companies. Previously, the SEC established a voluntary filing programme for XBRL reporting in March 2005. Accordingly, the objectives of our study are: 1) to provide an overview of the benefits and global development of XBRL; 2) to evaluate the extent of XBRL adoption following the implementation of the voluntary filing programme. We find the quantity of voluntary reporting to be relatively low, but reporting significantly increased over time. Voluntary adopters are larger and more innovative firms in their industries. We find that the time lags between filing reports in XBRL format and the ending of the fiscal year and quarter decreased over the time period of our study. This evidence suggests that there is a learning curve with XBRL reporting that voluntary adopters experience. Possible learning gains in the reporting process may translate ultimately into marginal cost savings for companies and more timely information for investors. This evidence may be consistent with XBRL being purported to have a positive effect on accounting and financial reporting worldwide, particularly used in conjunction with international financial reporting standards (IFRS).

Keywords: XBRL; Securities and Exchange Commission; international financial reporting standards; IFRS; information technology; financial statements.

DOI: 10.1504/IJEA.2011.040113

International Journal of Economics and Accounting, 2011 Vol.2 No.2, pp.173 - 189

Published online: 21 Oct 2014 *

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