Longitudinal Analysis of Voluntary Adoption of XBRL on Financial Reporting

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

31 Pages Posted: 30 Jul 2009 Last revised: 26 Jul 2014

Jap Efendi

University of Texas at Arlington

Murphy Smith

Murray State University - Accounting Department

Jeffrey Wong

University of Nevada, Reno

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 program 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 and (2) to evaluate the extent of XBRL adoption following the implementation of the voluntary filing program. 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 evidence suggesting increasing efficiency in XBRL reporting, as reporting lags have significantly decreased over time. This efficiency improvement is positive news and may accrue to other companies after they are required to use XBRL reporting. XBRL is expected 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, IFRS, information technology

JEL Classification: M41, F23, G15

Suggested Citation

Efendi, Jap and Smith, Murphy and Wong, Jeffrey, Longitudinal Analysis of Voluntary Adoption of XBRL on Financial Reporting. International Journal of Economics and Accounting, Vol. 2, No. 2: 173-189, 2011. Available at SSRN: https://ssrn.com/abstract=1440956 or http://dx.doi.org/10.2139/ssrn.1440956

Jap Efendi

University of Texas at Arlington ( email )

415 S West St Apt no 205
Arlington, TX 76019
United States

Murphy Smith (Contact Author)

Murray State University - Accounting Department ( email )

Murray, KY 42071-3314
United States
270-809-4181 (Phone)

Jeffrey Wong

University of Nevada, Reno ( email )

United States

Paper statistics

Downloads
701
Rank
28,189
Abstract Views
3,038