Does XBRL Improve the Quality of Financial Statements in the Banking Industry?

Abstract

This study aims to determine the influence of the complexity of the banking business on the quality of financial statements that are moderated by the XBRL reporting form on the banking industry sector listed on the Indonesia Stock Exchange in 2017. The sample used was 43 banking companies from a total of 91 financial sector companies, based on purposive sampling. The complexity of the banking business in this study is measured by the level of complexity of the BOOK based on OJK regulations No. 6 / POJK.03 / 2016, the quality of financial statements is measured using non discretionary accruals and xbrl is measured by the use of the company in that year. In analyzing data, this study uses statistical tests of multiple regression analysis. Based on the calculation of multiple regression analysis with the help of Eviews 10 software, the relationship between the complexity of the banking business and the quality of financial statements is strengthened by the form of XBRL reporting

A Decade of XBRL Research in Accounting in Indonesia: A Literature Study

“…After observing each selected article by following the XBRL research theme classification guidelines provided by Perdana et al (2015) using XBRL research samples in the international sphere, the results of XBRL research theme classification in Indonesia generally have the same research theme cluster, i.e., i) The influence of XBRL on Business (see, e.g., Jayani et al, 2020;Junus and Irwanto, 2021;(Mahardika andHarahap, 2018) Mayapada, et al, 2020;Pamungkas and Kristanto, 2019;Prasetyo and Apandi, 2019;Saputro and Achjari, 2020;Tohang et al, 2020;Zamroni and Aryani, 2018); ii) Adoption of XBRL (see, e.g., Muchlis et al, 2019); iii) XBRL Engineering Development (see, e.g., Wijanarko and Moedjiono, 2015); and iv) XBRL education such as XBRL teaching and XBRL integration into the accounting curriculum (see, e.g., Wulandari and Ali, 2019;Pujisari and Biyanto, 2019). Table 4 explains the definition and scope of each theme.…”

“…Organizations or companies can automate the process of preparing financial statements more accurately, clearly, and easily attributable by all stakeholders in the necessary formats (Perdana et al, 2015). This XBRL reporting format enhances financial statement quality, meaning that when the XBRL reporting format is used, it reduces the likelihood of accrual policies from management to improve the quality of financial statements (Prasetyo and Apandi, 2019). For example, in banking organizations, it was found that banks reporting financial statements using XBRL had better quality than those that did not use XBRL (Prasetyo and Apandi, 2019).…”

“…This XBRL reporting format enhances financial statement quality, meaning that when the XBRL reporting format is used, it reduces the likelihood of accrual policies from management to improve the quality of financial statements (Prasetyo and Apandi, 2019). For example, in banking organizations, it was found that banks reporting financial statements using XBRL had better quality than those that did not use XBRL (Prasetyo and Apandi, 2019). In general, XBRL can answer the challenges of today's business, i.e., better management, low cost, and fast service (Perdana et al, 2015).…”

“…With the presentation of transparent data and can be observed more easily by stakeholders, the decision-making process in companies can be done more quickly and improve the ease of access to financial information for international investors (see, e.g., Junus and Irwanto, 2021). It is suggested that firms that have not delivered their financial statements with XBRL create an XBRL format to serve certainty and accessibility for investors and potential investors (Prasetyo and Apandi, 2019).…”

Does The XBRL Implementation and The Diversity of The Audit Committee Affect Quality of Financial Reports?

“…(Heidari Gandoman & Rostami, 2018) On the other hand, the existence of a direct relationship and significance between XBRL with the quality of financial reporting in Iran also improves the classification of transparency of financial funding and efficiency. Research conducted by (Prasetyo & Apandi, 2019) stated that XBRL affects financial reporting quality. XBRL will lose the possibility of doing policy the accrual of so that management can improve financial reports' quality.…”