Using XBRL to Conduct a Large-Scale Study of Discrepancies between the Accounting Numbers in Compustat and SEC 10-K Filings

Abstract

Compustat accounting database is frequently used for both research and decision-making. However, the accuracy and value of the information extracted from Compustat depend not only on the methods used to extract that information, but also on the validity of the data provided by Compustat. It has been documented (San Miguel 1977; Rosenberg and Houglet 1974; Yang et al. 2003; Tallapally et al. 2011, 2012; Boritz and No 2013) that information found in Compustat database differs from both the information found in other accounting databases and the information disclosed in corporate financial filings. In this study, we conduct the first large-scale comparison of Compustat and 10-K data. Specifically, we compare 30 accounting items for approximately 5,000 companies for the period from October 1, 2011 to September 30, 2012. We find that the values reported in Compustat significantly differ from the values reported in 10-K filings. We also find that the amount and magnitude of the original data alterations introduced by Compustat depend on the type of the accounting item and company characteristics such as industry and size.

Keywords: Compustat, 10-K, data quality, XBRL, data discrepancies, data aggregators