Extended XBRL Tags and Financial Analysts' Forecast Error and Dispersion

2020 ◽  
Vol 34 (3) ◽  
pp. 105-131 ◽  
Author(s):  
Joseph Johnston
Keyword(s):  
Instrumental Variables ◽  
Information Search ◽  
Forecast Error ◽  
Financial Analysts ◽  
Negative Relationship ◽  
Financial Statements ◽  
Additional Analysis ◽  
Business Reporting ◽  
Reporting Environment ◽  
Footnote Disclosures

ABSTRACT This paper investigates whether the use of extended tags in eXtensible Business Reporting Language (XBRL) filings is associated with financial analysts' forecast error and dispersion. The SEC allows firms to create customize tags in their XBRL filings to reflect firm-specific disclosures. However, customized tags may inhibit information search and reduce the usefulness of XBRL data. Since the use of extended tags is driven by the firm's reporting environment, an instrumental variables technique is employed to control for endogeneity. The results show that more extensions are related to smaller analysts' forecast error and dispersion after controlling for endogeneity. In additional analysis, extensions in footnote disclosures are found to drive this negative relationship, and extensions in the financial statements are marginally positively associated with forecast error and dispersion. This study is relevant to regulators creating policies about XBRL extensions.

Corporate Social Responsibility and Financial Reporting Quality:Evidence from Restatements

2020 ◽  
Author(s):  
Yi-Hung Lin ◽  
Hua-Wei (Solomon) Huang ◽  
Mark E. Riley ◽  
Chih-Chen Lee
Keyword(s):  
Financial Reporting ◽  
Negative Relationship ◽  
Reporting Quality ◽  
Financial Statements ◽  
Financial Statement ◽  
Financial Reporting Quality ◽  
Csr Reporting ◽  
Corporate Social ◽  
Reporting Environment ◽  
The Relationship

We find a negative relationship between aggregate CSR scores and the probability that firms restated financial statements over the period 1991-2012. We then break that period into three sub-periods in order to determine whether the relationship holds for all three sub-periods. During the sub-periods of 1991-2001 and 2002-2005, the negative CSR score - restatement probability relationship holds. The negative relationship disappears in the 2006-2012 sub-period. Additional analyses indicate CSR scores are significantly higher in the 2006-2012 sub-period, suggesting the disappearance of the relationship between aggregate CSR scores and financial statement quality may relate to changes in CSR assessments and the CSR reporting environment. Our findings update the literature linking CSR scores and financial reporting quality and identify the need for further research as to the reasons the link between these constructs disappeared.

scholarly journals The Expected Effect of Using eXtensible Business Reporting Language (XBRL) on the Extent of Using Ordinary Financial Statements by External Users in Jordan

2021 ◽  
Vol 10 (5) ◽  
pp. 249
Author(s):  
Thaer Faisal Abdelrahim Qushtom
Keyword(s):  
Decision Making ◽  
Negative Relationship ◽  
Financial Statements ◽  
Business Systems ◽  
Financial Reports ◽  
Significance Level ◽  
Business Reporting ◽  
Significant Negative Relationship ◽  
Presentation Methods ◽  
Analyze Data

In 2000, a freely available modern global framework to exchange and communicate business information among business systems has emerged and called the eXtensible Business Reporting Language (XBRL). The XBRL was designed to reduce differences in financial data presentation methods. The current study aimed mainly to find the feasibility of using the XBRL in Jordanian entities and the extent to which the ordinary financial statements can be replaced by the XBRL framework. A quantitative approach was used to collect and analyze data. Accordingly, 187 analyzable questionnaires were distributed and retrieved. The results showed that the majority of respondents are convinced that using the XBRL framework will provide them with relevant, reliable, comparable, timely, and required information. In addition, the coefficient measures showed that there is a significant negative relationship between using the XBRL framework and the use of ordinary financial reports at the significance level of 0.01. Conversely, the results indicated that there is a significant positive relationship between using the XBRL framework and the usefulness of financial information in the planning and decision-making purposes. The results imply that Jordanian companies should turn to use the XBRL framework to present and communicate their financial reports, which will be reflected on increasing the confidence and interest of various users of financial reports in the company's results and management. Further, using the XBRL framework will enhance the planning and decision-making tools of users, which will be reflected on the interest of companies, especially those with good performance.   Received: 6 May 2021 / Accepted: 16 August 2021 / Published: 5 September 2021

Assurance on XBRL for Financial Reporting

2008 ◽  
Vol 22 (3) ◽  
pp. 353-368 ◽  
Author(s):  
R. David Plumlee ◽  
Marlene A. Plumlee
Keyword(s):  
Financial Reporting ◽  
Academic Research ◽  
Financial Statements ◽  
Securities And Exchange Commission ◽  
Financial Information ◽  
The Public ◽  
Business Reporting ◽  
Paper Version ◽  
Public Company ◽  
Reporting Environment

SYNOPSIS: Since 2004, the Securities and Exchange Commission (SEC) has taken steps toward requiring eXtensible Business Reporting Language (XBRL) to be used in its filings, including a voluntary filing program. “Tagging” financial information using XBRL creates documents that are computer readable and searchable. Once XBRL is required, investors are likely to demand assurance on the tagging process. The Public Company Accounting Oversight Board (PCAOB) has issued guidance on attest engagements regarding XBRL financial information furnished under the SEC’s current voluntary filer program, which relies on the auditor “agreeing” a paper version of the XBRL-related documents to the information in the official EDGAR filing. This approach may be adequate for the current paper-oriented reporting paradigm. However, once filing in XBRL becomes required, the power of XBRL to allow individual financial datum to be extracted from the SEC’s financial database will be realized. This “data-centric” idea is a crucial extension of the traditional reporting paradigm that will alter the way financial and nonfinancial data can be used. The current audit focus on reconciling only the XBRL output with the paper submissions does not address this paradigm shift. In this commentary, we discuss the SEC’s efforts to incorporate XBRL into its filing process and provide a brief overview of the technical aspects of XBRL. The commentary’s principal focus is on several important questions that assurance guidance must address in a data-centric reporting environment, such as, what constitutes an error, or what does materiality mean when individual pieces of financial data will be used outside the context of the financial statements? It also describes some XBRL-related areas where academic research can help guide XBRL-document assurance efforts.

scholarly journals Financial Markets’ Governance, Transparency and Informational Efficiency: Role of IfRS Norms, Auditors and Financial Analysts

2016 ◽  
Vol 9 (5) ◽  
pp. 100
Author(s):  
Imen Lamiri ◽  
Adel Boubaker
Keyword(s):  
Financial Markets ◽  
Stock Prices ◽  
Stock Price ◽  
Financial Analysts ◽  
Negative Relationship ◽  
Developed Countries ◽  
Coefficient Of Determination ◽  
Specific Information ◽  
Informational Efficiency

<p>This article explores the informational role of three essential modern financial markets actors such IFRS norms, the Big”4” and the financial analysts for a panel of emergent and developed countries during the period from 2001 to 2010. We hypothesis that these mechanisms help improving the quality of specific information incorporated into stock prices measured by the stock price synchronicity (SPS). The main result is that both financial analyst’s coverage and IFRS adoption's effects seem to be stronger for emerging than developed markets. The results also show a negative relationship between auditors’ opinion and coefficient of determination (R<sup>2</sup>).</p>

scholarly journals The Impact of Private Ownership Structure on Risk Taking by Pakistani Banks: An Empirical Study

2018 ◽  
Vol 6 (3) ◽  
Author(s):  
Muhammad Sajjad Hussain ◽  
Muhammad Muhaizam Bin Musa Musa ◽  
Muhammad Muhaizam Bin Musa Musa ◽  
Abdelnaser Omran Ali
Keyword(s):  
Ownership Structure ◽  
Risk Taking ◽  
Negative Impact ◽  
Negative Relationship ◽  
Financial Statements ◽  
International Standards ◽  
Bank Risk ◽  
Private Ownership ◽  
Private Banks ◽  
The Impact

The financial crisis of 2007-09 was converted the focus of researchers and regulators toward bank risk-taking and this study is also analyzed the private ownership structure impact on Pakistani bank’s risk-taking. This study selects the all Pakistani private banks for investigation and data is collected from financial statements from 2005 to 2016. Most of the past studies found a negative impact of private ownership structure on bank risk-taking and this study is also indicated the negative relationship between private ownership and bank risk-taking. On the other, non-performing loans are double than the international standards that highlighted the owner’s attention toward high risky investments for high return. Thus, this study suggests that check this relationship with other factors that forced the owner’s behavior toward risk.

scholarly journals Analysis on the Effects of Quality of Financial Statements, Over GDP Forecasting Models. An Empirical Cross-Country Approach

2020 ◽  
Vol 15 (3) ◽  
pp. 236-260
Author(s):  
Burca Valentin ◽  
Mates Dorel ◽  
Bogdan Oana
Keyword(s):  
Economic Growth ◽  
Financial Reporting ◽  
Structural Changes ◽  
Causal Relation ◽  
Forecast Error ◽  
Financial Statements ◽  
Institutional Framework ◽  
Gdp Growth ◽  
The Impact

Abstract Under increasing macroeconomic uncertainty, governments base their economic policies on high-precision GDP estimates. The models considered based on building-up government budgets incorporate main drivers of economic growth, identified along a large range of empirical studies, mostly focused on economic productivity, factor accumulation, human capital, innovation and transfer of technology, structural changes, or institutional framework. However, there is little evidence related to the impact of accounting and assurance regulation on economic growth. Our study attempts to assess the significance of causal relation between forecasting error on GDP growth and quality of accounting standards, respectively quality of financial statements. The study analyzes the causal relation between country level measures of quality of financial reporting, synthetized by Isidro et. al. (2019), and the measure of GDP growth estimate mean error. Our results confirm a significant impact of quality of the output of financial reporting practice, related to disclosure quality and asymmetric timeliness. The results remain similar, even after controlling for accounting convergence influence. Checking for robustness of the model, we observe the main drivers of one year ahead GDP forecast error are related to institutional framework to issue high quality standards and enforce them properly. The results emphasize once again the role of economic development and corresponding complexity of economic activities and political framework impact on accounting regulation and subsequently on macroeconomic measures.

The Effect of iXBRL Formatted Financial Statements on the Effectiveness of Managers’ Decisions when Making Inter-Firm Comparisons

2020 ◽  
Author(s):  
Hyun Woong (Daniel) Chang ◽  
Steven Kaszak ◽  
Peter C. Kipp ◽  
Jesse C. Robertson
Keyword(s):  
Decision Making ◽  
Cognitive Load ◽  
Mediation Analysis ◽  
Information Search ◽  
Cognitive Load Theory ◽  
Financial Statements ◽  
Moderated Mediation ◽  
Financial Information ◽  
Load Theory ◽  
The Relationship

Following the SEC’s mandate for Inline XBRL (iXBRL) formatted financial filings, we experimentally investigate the effects of iXBRL filings and tag type (matching or non-matching) on managers’ decisions. iXBRL filings facilitate information search and information match by allowing users to view XBRL data in HTML filings, while XBRL filings facilitate information search only because they do not include this integration with human-readable HTML filings. Matching tags consistently tag data across firms and disclosures, which should facilitate inter-firm comparisons and improve decision making relative to non-matching tags. Drawing on cognitive load theory, we find that managers make more (less) effective decisions when presented with financial information formatted in iXBRL (XBRL) and when tags match (do not match). Mediation analysis reveals that managers’ cognitive load mediates the relationship between iXBRL disclosure format and decision effectiveness, but only for non-matching tags, consistent with moderated-mediation. We offer implications for practice and research suggestions.

XBRL Tag Extensions and Tax Accrual Quality

2020 ◽  
Author(s):  
Stephanie Walton ◽  
Liu L Yang ◽  
Yiyang Zhang
Keyword(s):  
Financial Reporting ◽  
Relative Rate ◽  
Financial Statements ◽  
Accrual Quality ◽  
Business Reporting ◽  
Prior Literature ◽  
Tax Reporting ◽  
Financial Reporting Comparability

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.

How Does Local Adoption of IFRS for Those Countries That Modified IFRS by Design, Impair Comparability with Countries That Have Not Adapted IFRS?

2017 ◽  
Vol 16 (3) ◽  
pp. 59-90 ◽  
Author(s):  
Elizabeth Felski
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Statement ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Study Results ◽  
Reporting Environment ◽  
Proper Translation

ABSTRACT Global adoption of International Financial Reporting Standards (IFRS) is thought to increase financial statement reliability and comparability. Although IFRS is required or allowed in over 130 nations, some countries modify IFRS as issued by the International Accounting Standards Board (IASB). This study is designed to closely examine each country that modifies IFRS in an effort to determine whether these modifications impair financial statement comparability. First is that countries lack the resources to implement the newest version of IFRS or ensure proper translation of the standards. Second is that countries make specific changes to allow IFRS to better meet the needs of their financial reporting environment. I categorize the first set of countries as default countries and the second set as design countries. The study results in several interesting and useful contributions. First, I develop a new typology for future IFRS research that includes not only the locally adopted category, but also the default and design categories. Second, the details of how countries modify IFRS make it clear that differences can exist in financial statements prepared in different countries both using IFRS. The users must be careful to understand how comparability may be impacted by these modifications.

scholarly journals Oil Prices and the U.S. Dollar Exchange Rate: Evidence from the Monetary Model

2018 ◽  
Vol 10 (4) ◽  
pp. 17
Author(s):  
Moayad H. Al Rasasi
Keyword(s):  
Exchange Rate ◽  
Forecast Error ◽  
Negative Relationship ◽  
Impulse Response Function ◽  
Decomposition Analysis ◽  
Oil Prices ◽  
Error Variance ◽  
Monetary Model ◽  
Forecast Error Variance ◽  
Positive Shock

This paper analyzes how changes in global oil prices affect the US dollar (USD) exchange rate based on the monetary model of exchange rate. We find evidence indicating a negative relationship between oil prices and the USD exchange rate against 12 currencies. Specifically, the analysis of the impulse response function shows that the depreciation rate of the USD exchange rate ranges between 0.002 and 0.018 percentage points as a result of a one-standard deviation positive shock to the real price of crude oil. In the same vein, the forecast error variance decomposition analysis reveals that variation in the USD exchange rate is largely attributable to changes in the price of oil rather than monetary fundamentals. In last, the out-of-sample forecast exercise indicates that oil prices enhance the predictability power of the monetary model of exchange rate.

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