This study aims to investigate whether eXtensible Business Reporting Language (XBRL) disclosure management solution improves public companies’ earnings release efficiency and mitigates earnings management.
This study adopts a unique survey data set from the Financial Executives Research Foundation 2013 to identify companies’ XBRL implementation strategies. Earnings release efficiency is measured by earnings announcement time lag. Multiple indicators of both accruals- and real activities-based earnings management are adopted to examine the research hypotheses.
The authors find that the disclosure management solution (DMS) XBRL implementation is positively associated with earnings release efficiency for companies with good news. The authors also find that DMS implementation strategy is negatively related to accruals-based earnings management, but positively related to real activities-based earnings management measured by abnormal cash flows.
The results of this study can inform regulators, investors and corporate management on how XBRL adoption is associated with corporate financial reporting.
The study contributes to the XBRL literature by providing empirical evidence on how the strategies adopted by companies to implement XBRL may affect the results of XBRL mandatory adoption.
The Financial Executive Research Foundation (FERF) generously granted access to its 2013 survey database for this study, for which we are grateful. We thank the anonymous referees and the Editor in Chief Maggie Liu for their valuable comments and suggestions. The paper has also benefitted from comments during presentations at the 2016 Canadian Academic Accounting Association Annual Conference and 2016 American Accounting Association Annual Meeting.
Hsieh, T., Wang, Z. and Abdolmohammadi, M. (2019), "Does XBRL disclosure management solution influence earnings release efficiency and earnings management?", International Journal of Accounting & Information Management, Vol. 27 No. 1, pp. 74-95. https://doi.org/10.1108/IJAIM-06-2017-0079Download as .RIS
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