XBRL Tag Extensions and Tax Accrual Quality

Journal of Information Systems, Forthcoming https://doi.org/10.2308/ISYS-19-054

Posted: 14 Nov 2020 Last revised: 16 Nov 2020

See all articles by Stephanie Walton

Stephanie Walton

Louisiana State University, Baton Rouge - Department of Accounting

Liu Yang

Southeast Missouri State University; University of Miami - Department of Accounting

Yiyang Zhang

Youngstown State University - Lariccia School of Accounting and Finance

Date Written: September 26, 2020

Abstract

The adoption of eXtensible Business Reporting Language (XBRL) requires management to label all information in their firm's financial statements and corresponding notes with either standardor custom extended tags. While prior literature has found that the rate of customization is associated with increased financial reporting complexity, there could be an unintended, beneficial consequence to tax reporting. We examine how the relative use of tax-related XBRL tag extensions could highlight unique tax activity characteristics, in turn increasing tax accrual quality and improving tax reporting transparency. We find that having a higher relative rate of extended tax tags is associated with higher tax accrual quality. That is, utilizing more tax tag extensions can assist in providing useful tax information, especially when a high number of total XBRL tags are used. Our results also suggest the need to reexamine the standard taxonomy to include more tax-oriented terms to improve financial reporting comparability.

Keywords: eXtensible Business Reporting Language (XBRL), Tax Accrual, Extensions, Financial Reporting of Income Taxes

Suggested Citation

Walton, Stephanie and Yang, Liu and Zhang, Yiyang, XBRL Tag Extensions and Tax Accrual Quality (September 26, 2020). Journal of Information Systems, Forthcoming https://doi.org/10.2308/ISYS-19-054 , Available at SSRN: https://ssrn.com/abstract=3700173

Stephanie Walton

Louisiana State University, Baton Rouge - Department of Accounting ( email )

E.J. Ourso College of Business Administration
2800 Business Education Complex
Baton Rouge, LA 70803
United States

Liu Yang

Southeast Missouri State University ( email )

1 University Plaza
Cape Girardeau, MO MO 63701
United States

University of Miami - Department of Accounting ( email )

Coral Gables, FL 33146-6531
United States

Yiyang Zhang (Contact Author)

Youngstown State University - Lariccia School of Accounting and Finance ( email )

United States

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