Research Question/Issue: In the last twenty years a technological revolution occurred fueled by the widespread diffusion of the internet. With regard to Financial Reporting, this trend also generated the development of Extensible Business Reporting Language (XBRL), which many accounting experts expect to revolutionize financial reporting since it allows corporate financial information to be aggregated, transmitted and analyzed quicker and more accurately (Bovee, Srivastava, & Mak, 2003). Current theory about taxonomy implementation assumes that the extension rate of IFRS-filers in comparison to U.S. GAAP-filers is much higher and therefore the objectives of standardization, comparability and reusability of the information that is sought with the XBRL framework is limited for the IFRS XBRL implementation (Bonsón, Cortijo, & Escobar, 2009). The Security Exchange Commission (SEC) has expressed similar concerns due to design difference, as the IFRS Taxonomy compared to U.S. GAAP only provides a reduced number of tags or elements so that the likelihood of companies creating extensions, or custom tags, in their XBRL submissions is much higher for IFRS than U.S. GAAP (Whitehouse, 2012). The research question is if these design difference can be confirmed based on empirical data for IFRS-filers in comparison to existing research findings on U.S. GAAP. Research Findings/Insights: The main research finding is that although the number of total elements within the U.S. GAAP taxonomy compared to the IFRS taxonomy is three times higher looking at empirical data it becomes obvious that this only represent a theoretical design difference and is misleading as in practice only a small portion of the U.S. GAAP taxonomy is really applied for XBRL taggings by corporations. Considering IFRS-filers, although the availability of data is limited, the average number of elements tagged and the average extension rate compared to U.S. GAAP considering factors such as industry, size and type of disclosures is similar. Methodology: An inductive quantitative method using public available IFRS XBRL filings is applied. For U.S. GAAP-filers available findings from XBRL studies are considered. To evaluate the impact of XBRL submission, this paper applies -- where indicated -- capital market theory and the concept of information efficiency. Theoretical/Academic implication: The study is based on the assumption that IFRS taxonomy extension rate is much higher than under U.S. GAAP. Practitioner/Policy implication: The study provides insights into XBRL for IFRS-filers listed on the NYSE and is relevant for practitioner, taxonomy developer as well as for the academic researcher.
|Number of pages||15|
|Publication status||Published - 2014|
|MoE publication type||D4 Published development or research report or study|
- financial reporting quality and inductive method