Academic journal article Global Business and Management Research: An International Journal

The Practitioner's Expectation of Real-Time Reporting: Case of the eXtensible Business Reporting Language (XBRL)

Academic journal article Global Business and Management Research: An International Journal

The Practitioner's Expectation of Real-Time Reporting: Case of the eXtensible Business Reporting Language (XBRL)

Article excerpt

Abstract

Purpose--Traditional reporting communicates without automated business reporting either via the Portable Document Format (PDF), HyperText Mark-up Language (HTML) or Excel and Word documents. On the other hand, real time reporting that has been applied by the eXtensible Business Reporting Language (XBRL) with automated business reporting has better extraction of data from websites and across databases. The rapid change to real time reporting could improve the financial reporting environment within the information supply chain. Thus, this study intended to explore the financial reporting environment's current and preferable exchange of information initiated by regulators. In addition, this study intended to uncover the expected costs, financial reporting benefits, information efficiency, audit process benefits and readiness to face pressures accrued from XBRL adoption.

Design/Methodology/Approach - The data were collected using the drop-off/pick-up method from a sample of 322 practitioners comprising auditors and accountants listed in the MIA directory as well as potential respondents who possess a background in XBRL and can provide valuable feedback relating to the XBRL concept. The instrument investigated issues related to benefits, costs, pressures and the readiness to adopt XBRL technology. In addition, the study also investigated preferences towards the reporting format, single submission, real-time reporting and the intention to use XBRL.

Findings - The findings from the 2015 study were different compared to findings of the 2012 study as the latter findings had described the practitioner's concerns. However, it is important to look into the changes in their concerns about XBRL. Perhaps the respondents might decide to adopt XBRL once they understood the concept and are ready to explore reporting technology. For understanding the cost, the study shows that practitioners were concerned about reducing the cost of auditing, generating financial reports and adopting XBRL. Moreover, they were also concerned on how XBRL could improve the efficiency of the financial reporting process, the accessibility of financial information and improving the audit process. Due to the lack of understanding about the XBRL concept, most of them preferred to attend any type of training in order to ensure their readiness. Perhaps, they believed that the pressure from government agencies would be a possible factor that ensured the future use of XBRL.

Research limitations/Implications - This study has had a significant impact on the financial reporting environment in Malaysia. It could also assist regulators, information providers, analysts, accountants, auditors and consumers to decide on whether to adopt eXtensible Business Reporting Language (XBRL) in future.

Keywords: XBRL, Malaysia, adoption, reporting

Introduction

Internet Financial Reporting and XBRL

Internet Financial Reporting is one way to disseminate financial data via internet using various formats such as PDF, Word or Excel files. Internet Financial Reporting involves different stages of disseminating data, which are referred to as traditional and second-generation reporting formats (Dune, Helliar, Lymer and Mousa, 2009). Currently, Internet Financial Reporting offers standardised data in real-time through the adoption of XBRL. The data will be exchanged throughout the supply chain much easier and efficiently as claimed by various researchers from countries such as the UK, UK HM Revenue and Customs and UK Companies House that have shown increasing use of XBRL filling (Mousa, 2011). Meanwhile, the U.S. Securities and Exchange Commission has mandated the use of XBRL (Debreceny, Farewell, Piechochi, Felden, Graning and D'eri, 2010). However, the benefits accrued from XBRL adoption could be different based on the style of adoption by each country. Furthermore, some studies have shown that XBRL had improved the company's reporting and performance. …

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