ReportTitle:
The Impact of XBRL Mandate on Readability of Financial Reports
Reporter(Institution):
Dr.Hongwei Zhu（University of Massachusetts Lowell）
Time:3:00.pm,11th May, 2017
Location:B-201, Building of Economics & Management, Jiulonghu Campus
Abstract:
The eXtensible Business Reporting Language (XBRL) is an open standard that aims to facilitate the preparation, exchange, and comparison of financial reports. Leveraging the opportunity created by the exogenous XBRL adoption mandated by the U.S. Securities and Exchange Commission, we use a difference-in-differences (DID) research design to identify the causal effect of XBRL adoption on readability of HTML-formatted financial reports, an important source of financial information for investors and analysts. We find that mandatory XBRL adoption has made adopting firms’ HTML-formatted financial reports more complex and harder to read. Further analysis shows that this undesirable effect is more pronounced for firms with more quantitative disclosure.
If time permits, examples of tapping into various forms of data for finance and accounting research will be discussed: (1) Inferring firm industry group from the usage pattern of XBRL tags; (2) Discovering topics of comment letters in FASB’s standard-setting process; (3) Employee integrity and corporate information quality.
Reporter:
Hongwei Zhu is an Associate Professor of Management Information Systems at the Manning School of Business, University of Massachusetts Lowell. Funded by National Science Foundation, MIT, and other organizations, his research focuses on data quality and analytics, with applications in finance and accounting. His work has appeared in MIT Sloan Management Review, Journal of Management Information Systems, and transactions and journals of ACM and IEEE. He is an associate editor of the ACM Journal of Data and Information Quality. He holds a Ph.D. from MIT.
