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Financial and governance characteristics of voluntary XBRL adopters in the United States

Financial and governance characteristics of voluntary XBRL adopters in the United States We examine a sample of voluntary eXtensible Business Reporting Language (XBRL) adopters, who are using the US Securities and Exchange Commission's Voluntary Filing Program, and compare them to pair-matched companies based on industry, size and governance score availability. We then explore internal and external characteristics of this sample to determine whether or not there are systematic differences between the voluntary filers and their control sample counterparts. We find that these early XBRL adopters are bigger, less financially leveraged and have lower corporate governance ratings than those of the control group. These variables are also effective in discriminating between companies adopting and not voluntarily adopting XBRL in the United States. Comparisons of liquidity, profitability and external risk measures provide no evidence of group differences. We conclude that larger and visible companies that are intrinsically riskier seek to improve their corporate governance appearance by cost-effectively and voluntarily adopting XBRL in US regulatory and corporate environments. Despite the results relating to these early XBRL adopters, we believe that XBRL will play a significant role in both internal and financial reporting, and that it will have a significant impact on corporations, investors, analysts, regulators and various other corporate stakeholders. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Disclosure and Governance Springer Journals

Financial and governance characteristics of voluntary XBRL adopters in the United States

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References (15)

Publisher
Springer Journals
Copyright
Copyright © 2009 by Palgrave Macmillan
Subject
Business and Management; Business and Management, general; Accounting/Auditing; Corporate Finance; Corporate Governance
ISSN
1741-3591
eISSN
1746-6539
DOI
10.1057/jdg.2009.15
Publisher site
See Article on Publisher Site

Abstract

We examine a sample of voluntary eXtensible Business Reporting Language (XBRL) adopters, who are using the US Securities and Exchange Commission's Voluntary Filing Program, and compare them to pair-matched companies based on industry, size and governance score availability. We then explore internal and external characteristics of this sample to determine whether or not there are systematic differences between the voluntary filers and their control sample counterparts. We find that these early XBRL adopters are bigger, less financially leveraged and have lower corporate governance ratings than those of the control group. These variables are also effective in discriminating between companies adopting and not voluntarily adopting XBRL in the United States. Comparisons of liquidity, profitability and external risk measures provide no evidence of group differences. We conclude that larger and visible companies that are intrinsically riskier seek to improve their corporate governance appearance by cost-effectively and voluntarily adopting XBRL in US regulatory and corporate environments. Despite the results relating to these early XBRL adopters, we believe that XBRL will play a significant role in both internal and financial reporting, and that it will have a significant impact on corporations, investors, analysts, regulators and various other corporate stakeholders.

Journal

International Journal of Disclosure and Governance – Springer Journals

Published: Oct 27, 2009

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