scholarly journals Critical reflection on XBRL: A “customisable standard” for financial reporting?

2013 ◽  
Vol 3 (2) ◽  
pp. 110
Author(s):  
Diego Valentinetti ◽  
Michele Antonio Rea
Keyword(s):  
Conceptual Framework ◽  
Financial Reporting ◽  
Critical Reflection ◽  
Financial Information ◽  
Financial Data ◽  
Specific Information ◽  
Reporting Practices ◽  
Data Comparability ◽  
The Us ◽  
Implementation Models

In this paper, we discuss the dual power of XBRL to standardise and/or accommodate firms’ financial reporting practices. We first develop a conceptual framework for understanding which factors may affect the adoption of XBRL and, in turn, standardise or customise financial reporting. We then examine the XBRL implementation models adopted in two countries: Italy and the US. In Italy, XBRL is required through the application of a standard taxonomy (the Italian GAAP Taxonomy), without the ability to create and submit taxonomy extensions. Conversely, in the US, XBRL is required through the application of a standard taxonomy (the US GAAP Taxonomy), along with the ability to define individual extensions to be submitted to the SEC. We discuss the potential effects of taxonomy application on the representation of financial information. The application of a taxonomy on a “blind basis” (extensions not permitted) leads not only to the full comparability of financial data but also to a loss of idiosyncratic information. The application of a taxonomy on a “minimum basis” (individual extensions permitted) preserves specific information, but causes a potential loss of data comparability.

scholarly journals Relevance of financial reporting quality - Theory and practice in Vietnamese enterprises

2017 ◽  
Vol 1 (Q2) ◽  
pp. 119-128
Author(s):  
Thuan Quoc Pham
Keyword(s):  
Conceptual Framework ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Professional Associations ◽  
Financial Statements ◽  
Theory And Practice ◽  
Financial Information ◽  
Financial Reporting Quality

Financial reporting quality is one the most interesting topics which draw a great deal of attention to researchers and scientists in the field of accounting (Céline Michailesco, 2010). In the review of research on financial information from 1980 to 2016, Pham (2016) found that characteristics of useful financial information are relatively diverse with as many as 15 attributes being identified. In addition, he also found that all research in any period has employed the characteristics published by professional associations such as American Institute of Accountants, Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB as theoretical basis. Research on the quality of financial information is diverse yet have many things in common, above all is the Relevance characteristic which considered to be the basic qualitative component of the quality of financial information in financial statements. Conceptual Framework officially issued by FASB & IASB in 2010 (FASB & IASB 2010) has further confirmed Relevance is the basic quality component of financial information. Compared with previous announcements, there has been a considerable change in the criteria and attributes used to evaluate the appropriateness of Relevance characteristic of financial information in financial statements. This study aims at confirming the importance of the Relevance component in evaluating the quality of financial information, clarifyingg the characteristics of Relevance measurement before and after Conceptual Framework 2010 and constructing relevant scales as well as measuring the qualitative characteristic of Relevance among enterprises in Vietnam.

Digital corporate reporting and value relevance: evidence from the US and Japan

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yuan George Shan ◽  
Indrit Troshani
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Value Relevance ◽  
Accounting Information ◽  
Financial Information ◽  
Content Type ◽  
Corporate Reporting ◽  
The Us ◽  
The Impact ◽  
Corporate Financial Reporting

PurposeThe study improves current understanding concerning the implications of digital corporate reporting technology on the informativeness of accounting information.Design/methodology/approachIt looks at how XBRL, an exemplar digital corporate financial reporting technology, affects value relevance of accounting information in the US and Japan, two key jurisdictions where XBRL has been mandated. We operationalise stock price and return value relevance models to assess and compare predicted associations between selected accounting measures and market value of equity in these countries.FindingsWe predict that the selected accounting measures are more value relevant after XBRL was mandated than before. We find evidence to support our prediction for the US sample. We also predict and find that the contribution of XBRL to the value relevance of the selected accounting measures is greater in the US than in Japan. Overall, our evidence provides support that digital corporate reporting technology enhances relevance and reliability of accounting measures.Originality/valueThe study appears to be the first to have examined the impact of XBRL on value relevance whilst comparing between two major jurisdictions. The study extends emerging but limited literature concerning the benefits of digital corporate financial reporting for enhancing the communication between firms and users of financial information. The findings are useful to both users of financial information and standard setters.

scholarly journals An analysis of fundamental concepts in the conceptual framework using ontology technologies

2014 ◽  
Vol 17 (4) ◽  
pp. 396-411 ◽  
Author(s):  
Marthinus Cornelius Gerber ◽  
Aurona Jacoba Gerber ◽  
Alta Van der Merwe
Keyword(s):  
Conceptual Framework ◽  
Financial Reporting ◽  
Formal Language ◽  
Design Science ◽  
Accounting Standards ◽  
Science Research ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Reporting Practices ◽  
Financial Reporting Standards

The interpretation of financial data obtained from the accounting process for reporting purposes is regulated by financial accounting standards (FAS). The history and mechanisms used for the development of ʻThe Conceptual Framework for Financial Reporting’ (the Conceptual Framework) as well as the financial accounting standards resulted in impressive volumes of material that guides modern financial reporting practices, but unfortunately, as is often the case with textual manuscripts, it contains descriptions that are vague, inconsistent or ambiguous. As part of the on-going initiatives to improve International Financial Reporting Standards (IFRS), the International Accounting Standards Board (IASB) promotes the development of principle-based IFRS, which aim to address the problems of vagueness, inconsistency and ambiguity. This paper reports on the findings of a design science research (DSR) project that, as artefact, developed a first version ontology-based formal language representing the definitions of asset, liability and equity (the fundamental elements of the statement of financial position as defined in the Conceptual Framework) through the application of knowledge representation (ontology) techniques as used within computing. We suggest that this artefact may assist with addressing vagueness, inconsistencies and ambiguities within the definitions of the Conceptual Framework. Based on our findings, we include suggestions for the further development of a formal language and approach to assist the formulation of the Conceptual Framework. The project focuses on the Conceptual Framework for Financial Reporting after the incorporation of Phase A in the convergence project between the Financial Accounting Standards Board (FASB) and IASB.

scholarly journals Sustainability Performance Indicators and Non-Financial Information Reporting. Evidence from the Italian Case

2020 ◽  
Vol 10 (1) ◽  
pp. 13 ◽  
Author(s):  
Domenico Raucci ◽  
Lara Tarquinio
Keyword(s):  
Financial Reporting ◽  
Performance Indicators ◽  
Value Added ◽  
Financial Information ◽  
Reporting Practices ◽  
Sustainability Performance ◽  
Italian Case ◽  
Eu Directive ◽  
Before And After ◽  
Guidelines And Standards

Non-financial reporting is a growing topic, and the adoption of the EU Directive 2014/95/EU on non-financial information (NFI) is increasing the use of this reporting. One of the most distinctive elements of guidelines and standards that are widely used to draw-up reports on NFI is sustainability performance indicators (SPIs). SPIs can provide a significant value-added to non-financial corporate communication, and they are useful tools to support internal decision-making processes. The purpose of this study is to examine the effects produced on SPIs disclosure by the entry into force of the Italian Decree implementing the Directive on NFI. Content analysis method is used to analyze indicators disclosed by Italian companies before and after the adoption of the Decree. Findings show that each category of SPIs was largely used by the companies of our 2012 sample, but a reduction of the quantity of indicators disclosed was documented in 2017. Therefore, after the introduction of mandatory disclosure of NFI, companies seem to focus only on indicators considered more “relevant” according to the Directive. This research represents one of the preliminary analysis on the adoption of the Directive in Italy and on its first effects on NFI reporting practices.

scholarly journals Standard-Setters Versus Big4 Opinion, Concerning Iasb Revision Project of the Conceptual Framework for Financial Reporting. the Case of Presentation and Disclosures Chapter

2015 ◽  
Vol 25 (2) ◽  
pp. 81-107
Author(s):  
Valentin Burca ◽  
Dorel Mates ◽  
Adriana Puscas
Keyword(s):  
Conceptual Framework ◽  
Financial Reporting ◽  
Financial Statements ◽  
Financial Information ◽  
Economic Systems ◽  
Accounting System ◽  
Narrow Scope ◽  
Comment Letters ◽  
Current List

Abstract On the last decades the accounting system haven‘t been able to follow the dynamics of the economic systems generated by the globalization process. In order to reduce the lag between the demand of financial information and the offer of financial information, IASB has started numerous initiatives aiming the increase on the quality of the financial information. Among the current list of current IASB major projects there is also the project of revising the actual conceptual framework for financial reporting. This study is designed to give some directions that will be considered on the exposure draft of this project, analyzing the comment letters submitted by the members of ASAF and the Big4 as well. The study reveals the increasing importance the preparers and users give to the disclosures included on the notes to the primary financial statements. Moreover, on this study we emphasize several challenges that IASB has to face on issuing the exposure draft for this important project. Some of the main challenges refer to the narrow scope of the financial statements, the criteria used on classification, aggregation and offsetting, or the use of the materiality concept

scholarly journals UNDERSTANDING EXPECTATION GAP IN TERMS OF CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING

InterConf ◽  
2021 ◽  
pp. 39-45
Author(s):  
Farida Sadigova
Keyword(s):  
Statistical Analysis ◽  
Conceptual Framework ◽  
Financial Reporting ◽  
Financial Information ◽  
Sufficient Knowledge ◽  
Economic Decisions ◽  
Expectation Gap ◽  
User Groups ◽  
The Given ◽  
Qualitative Characteristics

The main purpose of financial reporting is to provide information to user groups, such as providers of finance, investors, shareholders, and others, that will be useful for them in making economic decisions. Expectation gap has been known as one of the major topics for debate in accountancy, so this paper aims to find out whether such gap exists in terms of perception of the importance of the financial information qualitative characteristics (defined in Conceptual Framework) from the perspectives of two groups (auditors and public) involved in working with and using such information. To achieve the purpose of the given paper, a survey was conducted, the results of which were used in the statistical analysis which is shown in the next sections of the paper. The survey was responded by 32 auditors and 38 representatives of public with sufficient knowledge in finance and accounting. Results of the statistical analysis show that there is some difference between auditors and public in terms of the importance perception of several elements from the financial information qualitative characteristics.

Voluntary versus mandatory non-financial disclosure

2019 ◽  
Vol 28 (5) ◽  
pp. 781-802 ◽  
Author(s):  
Federica Doni ◽  
Silvio Bianchi Martini ◽  
Antonio Corvino ◽  
Michela Mazzoni
Keyword(s):  
Financial Reporting ◽  
Financial Information ◽  
Communication Process ◽  
Initial Assessment ◽  
Financial Reports ◽  
Content Type ◽  
Reporting Practices ◽  
European Directive ◽  
Ex Post

Purpose The recent European Union Directive 95/2014 enforced a radical shift from voluntary to mandatory disclosure of non-financial information. Given radical changes in reporting practices, there is an urgent need to assess the firms’ attitude to disclose non-financial information regarding the new requirement. This paper aims to investigate whether the quantity and quality of non-financial information, voluntarily disclosed in the years before the directive came into force, were linked to the level of compliance. Design/methodology/approach Selecting a sample of 60 Italian companies from the obliged entities, the authors carried out a manual content analysis on corporate reports and developed some research hypotheses to explore if their sustainability practices can affect non-financial disclosures required by the Italian adoption of the European directive (i.e. Legislative Decree 254/2016). Findings Evidence showed that prior skills and competencies in non-financial reporting made a significant contribution especially regarding to the presence of business model, but further efforts are expected to improve the quality of non-financial reports. Practical implications This study yields an initial assessment of the implementation of the European directive in Italy. It may, therefore, help policymakers to identify ways to improve the harmonization of reporting practices. Preparers can also be supported in choosing different positioning of reporting on non-financial information. Originality/value This research provides interesting insights into the ex ante and ex post adoption of the European directive by investigating how Italian companies are reacting to regulatory and institutional requirements. One of the main problems remains the lack of a shared understanding of the term “non-financial”, which can make the communication process difficult and unclear.

Corporate Reporting on the Internet

1999 ◽  
Vol 13 (3) ◽  
pp. 241-257 ◽  
Author(s):  
Hollis Ashbaugh ◽  
Karla M. Johnstone ◽  
Terry D. Warfield
Keyword(s):  
Financial Reporting ◽  
Web Sites ◽  
Data Gathering ◽  
Financial Information ◽  
Financial Data ◽  
Annual Reports ◽  
The Internet ◽  
Corporate Reporting ◽  
Internet Presence ◽  
Use Of The Internet

In this paper, we examine firms' use of the Internet to enhance the relevance of their financial reporting. We define a firm as practicing Internet Financial Reporting (IFR) when it provides in its web site either (1) a comprehensive set of financial statements (including footnotes and the auditors' report), (2) a link to its annual report elsewhere on the Internet or (3) a link to the U.S. Security and Exchange Commission's (SEC) Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. While 70 percent of the firms in our sample engage in IFR, we find substantial variation in the quality of firms' IFR practices. Specifically, the variations in quality pertain to the timeliness and therefore, the usefulness of firms' financial reporting on the Internet. We find that some firms provide more timely financial disclosures via the Internet (e.g., monthly sales) while other firms report outdated financial data (e.g., two-year old annual reports). We also observe that the usefulness of firms' financial reporting on the Internet depends on how easy it is to access that data, the amount of data disclosed and/or whether users can download or analyze the data. To substantiate firms' incentives for engaging in IFR, we sent surveys to firms with web sites in our sample and asked them to report their perceived costs and benefits related to establishing an Internet presence. Firms responded to our questions about why they established an Internet presence by indicating that they perceive their web sites to be an important vehicle to disseminate information to shareholders. After documenting how and why firms use the Internet to voluntarily disclose financial information, we develop the implications of such practices for consumers who demand financial information, firms that supply financial data, auditors and market regulators.

scholarly journals Information About Cost of Goods Produced and its Usefulness for Production Engineers – A Case of SME

2017 ◽  
Vol 25 (4) ◽  
pp. 267-272 ◽  
Author(s):  
Ewa Wanda Maruszewska ◽  
Marzena Strojek-Filus ◽  
Zita Drábková
Keyword(s):  
Decision Making ◽  
Financial Reporting ◽  
Financial Information ◽  
Measurement Process ◽  
Financial Data ◽  
Decision Making Process ◽  
Crucial Importance ◽  
Important Input ◽  
Close Cooperation

AbstractThe article stresses the consequences of simplifications implemented in the measurement process of goods produced that are of crucial importance to production engineers in SME. The authors show the variety of possibilities that might be used by financial employees together with probable outputs in terms of valuation distortions. Using the case study the authors emphasis the importance of close cooperation of production engineers with finance professionals as out-puts of finance departments consist an important input for decision-making process of production managers. Further-more, demonstrated deficiencies in terms of methods applicable in financial reporting for measurement of the value of goods produced indicate the need for incorporation more financial and non-financial data in the process of judgments about the final cost of goods produced as simplifications applied in SME distort financial information provided to production engineers.

scholarly journals Factors Affecting Financial Reporting through the Internet (Internet Financial Reporting) in the Company's Website (Literature Study)

2021 ◽  
pp. 1-10
Author(s):  
Audrey M. Siahaan ◽  
Hesti Arwi Waruwu ◽  
Victor H. Sianipar ◽  
Oloan Simanjuntak
Keyword(s):  
Financial Reporting ◽  
Firm Size ◽  
Rapid Development ◽  
Foreign Ownership ◽  
Financial Information ◽  
The Internet ◽  
Public Ownership ◽  
Business World ◽  
Reporting Practices ◽  
Auditor Reputation

The use of the internet in the business world has influenced the traditional form of presenting corporate information. In addition, the rapid development of the internet creates new ways for companies to communicate with investors. Companies use the internet to report financial information to investors, known as Internet Financial Reporting (IFR). Disclosure of data on the company's website is a signal from the company to outside parties, one of which is reliable financial information and will reduce uncertainty about the company's prospects. This article examines the effect of firm size, profitability, liquidity, type of industry, leverage, auditor reputation, age of listing, level of public ownership, and level of foreign ownership on the probability of companies implementing Internet Financial Reporting (IFR). The data used in this study is secondary data in the form of data from non-financial companies listed on the Indonesia Stock Exchange. The conclusion that can draw from this article is that the variables of profitability, firm size, liquidity, type of industry, auditor reputation, foreign ownership, and public ownership have a positive and significant effect on financial reporting practices via the internet (Internet Financial Reporting). While the leverage variable, listing age, was not proven to substantially impact financial reporting practices via the internet (Internet Financial Reporting).

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