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.

scholarly journals Use of Financial Ratios in selecting entities for Tax Audit purposes – empirical study in Albania

2021 ◽  
Vol 17 ◽  
pp. 297-313
Author(s):  
Rezarta Shkurti ◽  
Elena Myftaraj ◽  
Elsia Gjika
Keyword(s):  
Financial Reporting ◽  
Tax Evasion ◽  
Tax Avoidance ◽  
Binary Logistic Regression ◽  
Financial Statements ◽  
Financial Ratios ◽  
Risk Indicators ◽  
Economic Entity ◽  
Tax Audit ◽  
Tax Reporting

Information from financial statements and reported financial ratios have long been used to detect common phenomenon such as fraudulent financial statements, earnings management, and the relation between financial ratios and the level of tax risk of an entity. The focus of this study is to research the use of financial ratios that entities declare, in the detection of the magnitude of tax avoidance. In this paper we apply a binary logistic regression to detect which financial statement ratios differentiate between tax evading and non-tax evading entities. We analyse data from 183 tax audited Albanian entities for 2015 and 2016 accounting years and calculate several financial ratios to determine the level of tax risk based on the tax evasion magnitude found by the tax audit of these entities. We apply univariate and multivariate analysis and find several important ratios that can indicate quite accurately the high risk of tax audit of an economic entity. We suggest including these ratios as risk indicators or “red flags” in the selection procedures employed by the tax auditors. As tax reporting and financial reporting have similarities across countries of the region, our findings may be useful for other Southern Eastern European Countries as well.

scholarly journals РОЗКРИТТЯ НЕФІНАНСОВОЇ ІНФОРМАЦІЇ В ЗВІТНОСТІ ПІДПРИЄМСТВ МАЛОГО БІЗНЕСУ

2020 ◽  
pp. 174-182
Author(s):  
Tetyana Gogol ◽  
Vadym Kolotok
Keyword(s):  
Small Business ◽  
Financial Reporting ◽  
Local Governments ◽  
Labor Relations ◽  
Accounting Standards ◽  
Environmental Issues ◽  
Financial Statements ◽  
Financial Information ◽  
Business Reporting ◽  
Do So

The article substantiates the importance of displaying non-financial information to external and internal users of small business reporting and also proves the need to disclose information on human rights and labor relations, anti-corruption activities, interaction with local governments, environmental issues and so on. Accounting standards governing the formation of various types of non-financial statements have been analyzed, together with the indicators which are further disclosed in such reports in order to confirm analytical information. The types of non-financial reporting constituting Ukrainian enterprises have been considered, the composition of indicators appropriate for disclosing to small business enterprises, which are already submitting reports or planning to do so in the future, have been justified.

Transaction-based lending and accrual quality

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Stephen Gray ◽  
Arjan Premti
Keyword(s):  
Earnings Quality ◽  
Financial Statements ◽  
Financial Statement ◽  
Cost Of Debt ◽  
Accrual Quality ◽  
Content Type ◽  
Income Statement ◽  
Prior Literature ◽  
The Cost

PurposeThis study examines how lenders modify their behavior and their use of traditional, transaction-based lending models in credit decisions when faced with low earnings quality.Design/methodology/approachTo measure the earnings quality, following Bharath, Sunder and Sunder (2008), the authors use three measures of accrual quality and combine them into a simple parsimonious measure of accrual quality. Subsequently, the authors apply the incremental R-square approach used by Kim and Kross (2005) to determine the degree to which lenders modify their reliance on financial statement ratios when faced with low accrual quality.FindingsConsistent with prior literature, this study shows that the cost of debt is higher when accrual quality is low. In addition, this study extends prior literature by showing that lenders decrease their reliance on income statement data to make credit decisions as accrual quality decreases.Originality/valueThis paper broadens existing literature on the pricing of information risk in capital markets by being the first to show that lenders modify their reliance on financial statement data when faced with low-quality accruals. In addition, this paper extends the findings of Billings and Morton (2002) and demonstrates to managers the futility of using accrual manipulations to obtain more favorable credit terms. Lastly, this paper aids regulators and standard setters who seek to improve the usefulness of financial statements by showing that creditors do not appear to be misled by reporting choices that lower the quality of accruals.

Auditor Style and Financial Reporting Similarity

2020 ◽  
pp. 0000-0000 ◽  
Author(s):  
Joseph A. Johnston ◽  
Joseph H. Zhang
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Audit Fees ◽  
Business Reporting ◽  
Similar Line ◽  
Alternative Metrics

In this study, we examine whether auditor style is related to financial reporting similarity. Based on the count of accounting items disclosed in eXtensible Business Reporting Language (XBRL) 10-K filings, we define financial reporting similarity in terms of the number of similar line items reported by a pair of firms and develop a measure of pairwise financial reporting similarity. Consistent with the auditor style literature (e.g., Francis, Pinnuck, and Watanabe 2014), we show that firms that share the same auditor have more similarities in their financial statements. We find robust results using alternative metrics of auditor style, including pairwise comovement of audit fees and audit timeliness. We also find that financial reporting similarity increases (decreases) when firms switch from having different (the same) auditors to having the same (different) auditors.

Implementation of foreign practice of regulation and accounting and reporting in Russia

2020 ◽  
pp. 215-222
Author(s):  
N. Yu. Orlova
Keyword(s):  
Comparative Analysis ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Statements ◽  
National Standards ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Tax Reporting ◽  
International Comparability

The reform of accounting and reporting in Russia began in the 1990s. The benchmark was taken on International Financial Reporting Standards, as many countries use these standards. IFRS have a number of advantages, such as simplicity, objectivity, international comparability. The author of the article gives the main problems, as a result of which, for almost thirty years, national standards have come very slightly closer to international ones. The author of the article gives the main problems, as a result of which, for almost thirty years, national standards have come very slightly closer to international ones. In the comparative analysis of accounting and the preparation of accounting and tax reporting according to Russian Accounting Standards (RAS) with International Financial Reporting Standards (IFRS), fundamental differences were revealed in the reflection of accounting objects in financial statements.

scholarly journals Users’ Perspective of Extensible Business Reporting Language (XBRL) in India

2017 ◽  
Vol 3 (2) ◽  
Author(s):  
S. Raghavendra Raju ◽  
B. Mahadevappa
Keyword(s):  
Financial Reporting ◽  
Paradigm Shift ◽  
Electronic Communication ◽  
Financial Statements ◽  
Financial Data ◽  
Annual Reports ◽  
Primary Data ◽  
Business Reporting ◽  
The Difference ◽  
Qualitative Characteristics

There has been a paradigm shift in financial reporting after the introduction of Extensible Business Reporting Language (XBRL). XBRL is a language for electronic communication of business and financial data. The Ministry of Corporate Affairs of Government of India has mandated e-filing of annual reports for certain class of companies in XBRL format from April 1, 2011. Now, more than 1 lakh companies are filing their financial statements through XBRL. The purpose of this paper is to know the users’ awareness about XBRL. The sample for the study includes 76 users. Research instrument was constructed to collect the primary data from the respondents. Hypothesis was tested to know the difference in the users’ perspective about XBRL. The results of the study were presented in five qualitative characteristics: understandability, reliability, relevance, comparability, and timeliness. The results of the paper indicate that there is more understandability, reliability, and relevance of financial statements among the users along with easier comparison of XBRL reports across companies.

scholarly journals PELAPORAN PAJAK PENGHASILAN PELAKU USAHA KECIL DAN MENENGAH DI DESA KARANGKUTEN KECAMATAN GONDANG KABUPATEN MOJOKERTO

2020 ◽  
Vol 6 (1) ◽  
pp. 28-31
Author(s):  
Aristha Purwanthari Sawitri ◽  
Rina Fariana ◽  
Bayu Adi Bayu Adi ◽  
Suhariyanto Suhariyanto ◽  
Martha Suhardiyah
Keyword(s):  
Community Service ◽  
Financial Reporting ◽  
Income Tax ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
Self Assessment ◽  
Financial Reports ◽  
Service Activity ◽  
Tax Reporting

Guna mempermudah dalam melakukan penghitungan pajak dan pelaporannya secara self assesment maka pelaku UMKM perlu melakukan penyusunan pelaporan fiskal. Dalam penyusunan pelaporan fiskal didasarkan atas pelaporan keuangan komersial yang disesuaikan dengan peraturan perpajakan. Bagi pelaku UMKM dapat menggunakan dasar Standar Akuntansi Keuangan Untitas Tanpa Akuntabilitas Publik (SAK-ETAP) yang telah dibuat oleh Ikatan Akuntan Indonesia. Desa Karang Kuten Kecamatan Gondang Kabupaten Mojokerto merupakan desa yang memiliki banyak potensi dan UMKM. Pada desa ini ditemukan bahwa pelaku UMKM masih banyak yang belum memiliki pemahaman mengenai pajak terutama belum memahami perhitungan pajak yang harus dibayar serta belum memahami pembuatan pelaporan pajak. Berdasarkan permasalahan yang dihadapi oleh pelaku UMKM, maka tim dosen memberikan solusi atas permasalahan yang ditemukan antara lain  memberikan pelatihan penyusunan laporan keuangan sederhanan guna membantu pelaku UMKM.  Metode yang digunakan dalam kegiatan pengabdian ini pertama sosialisasi, kedua pelatihan dan ketiga pendampingan. Hasil kegiatan pengabdian kepada masyarakat adalah pelaku UMKM telah mampu untuk menyusun laporan keuangan untuk mengetahui jumlah omzet, pelaku UMKM telah mampu menghitung pajak penghasinal final dan menyusunan laoran fiskal sebagai dasar penghitungan pajak penghasilan kepada pengusaha UMKM di Desa Karang Kuten Kecamatan Gondang Kabupaten Mojokerto. Dengan pelaksanaan kegiatan pengabdian ini dapat meningkatkan kesadaran untuk menjalankan kewajibannya dalam membayar pajak.In order to make it easier to do tax calculation and self-assessment reporting, MSME actors need to prepare fiscal reporting. In the preparation of fiscal reporting based on commercial financial reporting adjusted to tax regulations. MSMEs can use the basis of the Financial Accounting Standards without Public Accountability (SAK-ETAP) that has been made by the Indonesian Institute of Accountants. Karang Kuten Village Gondang District Mojokerto Regency is a village that has a lot of potential and MSMEs. In this village, it was found that there were still many SMEs who did not have an understanding of taxes, especially not understanding the calculation of taxes to be paid and did not understand making tax reporting. Based on the problems faced by SMEs, the lecturer team provides solutions to the problems found, among others, providing training in preparing financial statements to help MSME entrepreneurs. The method used in this community service activity is firstly socializing, secondly training and thirdly mentoring. The results of community service activities are that MSMEs have been able to compile financial reports to find out the turnover, MSMEs have been able to calculate the final criminal tax and compile a fiscal report as a basis for calculating income tax for MSME entrepreneurs in Karang Kuten Village, Gondang District, Mojokerto Regency. By carrying out this service activity, it can increase awareness to carry out its obligations in paying taxes.

scholarly journals TAXONOMY OF FINANCIAL STATEMENTS ACCORDING TO INTERNATIONAL STANDARTS

2021 ◽  
pp. 81-84
Author(s):  
Kulyk V. ◽  
Levchenko Z. ◽  
Yermolaieva M.
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
International Financial Reporting Standards ◽  
Government Agencies ◽  
Reporting Standards ◽  
Business Reporting ◽  
Financial Reporting Standards ◽  
Advantages And Disadvantages ◽  
It Systems ◽  
The One

Starting in 2020, some businesses in Ukraine will submit financial statements to government agencies in eXtensible Business Report-ing Language format. These changes in the current legislation require companies that fall under this legislation to use new approaches in preparing and submitting financial statements. eXtensible Business Reporting Language, which stands for eXtensible Business Reporting Language, is an XML-based language for tagging financial data, and enabling businesses to efficiently and accurately process and share their data. eXtensible Business Reporting Language taxonomies play the important role in financial reporting. On the one hand, they pro-vide a system of computer-readable tags to allow the interchange of interactive information. On the other hand, a systematic, agreed-upon convention for naming each taxonomy tag is needed. The International Financial Reporting Standards taxonomy does not include tags for industry International Financial Reporting Standards reporting. Although the International Financial Reporting Standards taxonomy provides opportunities for expansion, taking into account the specifics of individual industries, not all jurisdictions will require or allow the use of the possibility of expansion. The purpose of the article is to identify the advantages and disadvantages of implementing the eXtensible Business Reporting Language format for the presentation of financial statements in Ukraine under International Financial Reporting Standards, as well as possible ways to organize this process in domestic enterprises. The results of the study identified the benefits of implementing such reporting for different groups of users of financial reporting information. It is determined that the algorithm of preparation for the transition to reporting in eXtensible Business Reporting Language consists of the following steps: 1) checking their own IT systems for the ability to generate reports in eXtensible Business Reporting Language format; 2) mapping of data from IT systems and extended taxonomy UA eX-tensible Business Reporting Language International Financial Reporting Standards; 3) eXtensible Business Reporting Language validation.Keywords: financial statements, international financial reporting standards, taxonomy, XBRL, iXBRL. Починаючи з 2020 р. частина суб’єктів господарювання в Україні подаватиме фінансову звітність державним органам у форматі XBRL. Такий підхід є розповсюдженим у міжнародній практиці, проте достатньо новим для суб’єктів господарювання в Україні. Метою статті є визначення переваг та недоліків упровадження формату XBRL для подання фінансової звітності в Україні за МСФЗ, а також можливих способів організації цього процесу на вітчизняних підприємствах. За результатами дослідження встановлено переваги впровадження такого звітування для різних груп користувачів інформації фінансової звітності. Визначено, що алгоритм підготовки до переходу на звітування у XBRL складається з таких кроків: 1) перевірка власних ІТ-систем на предмет можливості формувати звітність у форматі XBRL; 2) мапінг даних із ІТ-систем і розширеної таксономії UA XBRL МСФЗ; 3) валідація XBRL.Ключові слова: фінансова звітність, міжнародні стандарти фінансової звітності, таксономія, XBRL, iXBRL.

scholarly journals Qualitative characteristics of business reporting: A historical perspective

2021 ◽  
Vol 18 (3, special issue) ◽  
pp. 360-366
Author(s):  
Vishal Verma ◽  
Yousef Shahwan
Keyword(s):  
Financial Reporting ◽  
Balance Sheet ◽  
Historical Review ◽  
Financial Statements ◽  
Business Reporting ◽  
Financial Reporting Standards ◽  
Economic Decision Making ◽  
Income Statement ◽  
Basic Objective ◽  
Qualitative Characteristics

This paper aims to provide a historical review of several leading documents in relation to the objectives of financial statements. Four main documents were discussed, analyzed and compared, using the content analysis approach. These documents are The Trueblood Report (1973), The Corporate Report (1976), Making Corporate Reports Valuable (McMonnies, 1988), and Guidelines for Financial Reporting Standards (Solomons, 1989). These documents were selected because they have been described as milestones in addressing qualitative characteristics of financial and business reporting. The historical review showed that the basic objective of financial statements is concerned with providing useful information for economic decision-making. In addition, it emphasized that information is useful when: 1) it shows the economic reality of the financial statements (i.e., balance sheet, income statement, and cash flow statement); and 2) it is relevant and reliable to users

Adios! Airways: An Assignment on Mapping Financial Statements to the U.S. GAAP XBRL Taxonomy

2010 ◽  
Vol 25 (3) ◽  
pp. 465-488 ◽  
Author(s):  
Roger Debreceny ◽  
Stephanie Farewell
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Securities And Exchange Commission ◽  
Financial Statement ◽  
Annual Reports ◽  
Business Reporting ◽  
Instructional Resource ◽  
Mapping Process ◽  
Interactive Data ◽  
The U.S

ABSTRACT: XBRL, based on XML, is an Internet language for disclosure of business reporting language. XBRL is the technological foundation for the interactive data mandate by the Securities and Exchange Commission (SEC). The mandate requires corporate filers to disclose data in quarterly and annual reports in XBL. A key building block supporting the mandate is a substantial U.S. GAAP XBRL taxonomy that encapsulates most of the reporting concepts found in financial reporting. Filers must align their existing reports to the taxonomy. The accuracy of mapping financial statement line items to the U.S. GAAP taxonomy is of fundamental importance. Mapping errors may be as simple as mapping to an incorrect taxonomy concept, which should be discovered during review. Ineffective mapping may lead to unnecessary extensions, which hinders comparability. This instructional resource guides students through the steps in mapping financial statement line items to the taxonomy. While the case does not require students to create an extended taxonomy, it does require completion of a spreadsheet detailing the mapping process that is typical of practice. In addition, the resource provides a checklist that users can refer to during the mapping process.

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