Academic journal article International Journal of Digital Accounting Research

The Impact of XBRL: A Delphi Investigation

Academic journal article International Journal of Digital Accounting Research

The Impact of XBRL: A Delphi Investigation

Article excerpt

Abstract. This project attempts to add to the extant research by presenting the results of a future forecasting Delphi study that addresses the impacts of XBRL in the second decade of the new millennium. The future impacts of XBRL [eXtensible Business Reporting Language] on financial reporting were studied using the Delphi technique. The Delphi panel suggests that XBRL is very likely to impact corporations, financial reporting, users of financial reports and auditing. The most likely impacts of XBRL include: increased accessibility of financial reports, easier regulatory compliance, enhanced availability of financial reports, facilitation of continuous reporting, and improved efficiency in investment and business decision making.

Keywords: XBRL, financial reporting, technology impacts, Delphi technique, accounting regulation.


A poll of leading information technology consultants, futurists and financial officers identified XBRL [eXtensible Business Reporting Language] as one of the seven cutting edge technologies expected to have a large impact on business and to revolutionize corporate performance (The Futurist 2003). XBRL has been identified by AICPA [American Institute of Certified Public Accountants] and FEI [Financial Executives Institute] leaders as an important initiative shaping the future of the profession (Harrington 2005) and has been mentioned for several years on the AICPA's top ten technologies list (AICPA 2006). The use of a universal business reporting language has been called for by many individuals and organizations (Lymer et al. 1999). Users want more flexibility, ease of use and timeliness in financial reporting (FASB 2000; CICA 1999; AICPA 1994). Recent business scandals and the passage of the Sarbanes-Oxley Act in the U.S. have created a ripe environment for the improvement of information quality via XBRL adoption (Elysée et al. 2004). Clearly, sweeping changes are ahead (Spaul 1997, ICAEW 1998, Ettredge et al. 2002).

Currently, over 500 companies, organizations and regulatory agencies are involved in the development of XBRL (XBRL 2010b). Two dozen countries, in addition to the International Accounting Standards Board, have formally established or are in the process of establishing XBRL jurisdictions (XBRL 2010a). Calls for the adoption of XBRL for electronic filing and efforts to make it happen are occurring in such disparate locations as India (Vasal and Srivastava 2005), Japan (XBRL Japan 2005), Ireland, China and South Africa (XBRL 2010b).

A U.S. Securities & Exchange Commission (SEC) Advisory Committee on Improvements to Financial Reporting [ACIFR] recommended mandatory phased-in adoption of XBRL tagging for SEC filings (ACIFR 2008), meaning all companies should adopt XBRL (Barlas 2008). April of 2009 brought an SEC mandate that requires all firms that are publicly traded on U.S. stock exchanges must file XBRL tagged financial statements to the SEC and publish these statements on their corporate websites by 2012 (SEC 2009). Other regulatory agencies, such as the U.S. Federal Deposit Insurance Corporation (FDIC, 2004) and the Australian Prudential Regulation Authority are also involved in efforts to use XBRL for regulatory reporting (Fahy et al. 2003, Kroener 2003, Hannon 2002). A survey found that two-thirds of accounting software vendors have released or are in the process of releasing XBRL-enabled products (XBRL 2003).

Along with all these mandates and calls for the use of XBRL, even more numerous predictions have appeared of the radical impacts its adoption will have on business and the accounting profession (Cohen 2005, Trites 2004, Wagenhofer 2003, Coffin 2001a & 2001b). However, some have suggested that interest in this type of technology is low (Xiao et al. 2002) and others have cautioned against overstatement and over hype by XBRL enthusiasts (Locke and Lowe 2007). Unfortunately, these predictions have been supported by little research investigating the probability of future XBRL impacts. …

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