The Business Financial Reporting with XBRL Technology

• Main Authors: Huey-Yeh Lin, 林慧葉
• Other Authors: 周濟群
• Format: Others
• Language: en_US
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/88368769426628356924

博士 === 國立雲林科技大學 === 管理研究所博士班 === 91 === Information asymmetry that contributes to higher external financing cost as well as agency cost exists in capital market for years. Although voluntary disclosure can improve market adverse selection and agency problem to some extent, proprietary cost largely limits the degree of disclosure from managers, thus decreases the efficiency of voluntary disclosure to resolve the information asymmetry.Along with the progress and popularity on World Wide Web, enterprise usually provides web site as a major communication channel to investors and other business partners. Meanwhile, end users face the difficulty while processing huge amount of information on Web sites which create information overload problem. In addition, investors lost confidence due to the incidences of fraudulent financial statements. Information asymmetry, information overload, and corporate misbehavior make communication between corporation and outside investors even more difficult. The major objective of this research is to promote an effective information distribution technology, XBRL. From the implementation of such technology, investors can efficiently acquire accurate, timely, and automated information to improve these stated issues and increase investment efficiency.XBRL is a new technology applied to business information reporting process. Advantages that XBRL brings to the financial reporting process show that XBRL is the future of financial reporting. The major tasks for XBRL consortium are to extend XBRL technology to an international standard and promote global capital market efficiency. Therefore, in order to achieve these goals, there are two important tasks need be accomplished which also serve as the purpose of this study. First, prove the value of XBRL which is a critical issue to promote this new technology. Second, identify the determinants of firm’s XBRL adoption which is a useful reference for XBRL consortium to encourage companies to adopt this new technology.Advantages of adopting XBRL have been broadly discussed in recent years. Nevertheless, most of discussions are descriptive in nature. This study is the first research to develop a theoretical economic model examining the added value of XBRL technology on the decision making process. This study assumes HTML and XBRL are the two information dissemination technologies used by companies. Under the assumptions of electronic information distribution channels and information overload problem, information provided by XBRL technology is likely to be more informative than that of HTML technology because XBRL has the ability to provide accurate, timely, and automated information. Therefore, the incremental expected utility of using XBRL tag is greater than that of using traditional HTML format. In addition, this study also performs comparative static analysis to demonstrate that the more informative of the information service, the larger the expected utility. The result of which is consistent with the Bayesian theory model. Finally, both comparative static analysis and Bayesian theory model are verified by a numerical example. Results of this study not only provide useful reference for academic, but also give a robust academic support for XBRL consortium to promote this new technology.After the value added of XBRL technology is theoretical verified, identifying determinants that encourage managers to adopt this new technology is next critical issue to support XBRL becomes an international standard. Four factors, including firm size, information risk, performance, and ownership diversification, are positively and significantly associated with the likelihood of firm’s XBRL adoption. Findings of the empirical test could provide a strategic suggestion for XBRL consortium that XBRL consortium can first target companies with characteristics of these determinants which would be able to improve the successful rates of XBRL adopting promotion. Therefore, increasing the efficiency for XBRL consortium to promote the use of XBRL as an international standard is the contribution of this study.