Standard Business Reporting in Australia: Past, Present, and Future

Abstract

Standard Business Reporting (SBR) is an Australian government initiative aimed at enhancing business productivity by reducing compliance costs. This initiative commenced in 2010 and is based on an international reporting language, eXtensible Business Reporting Language (XBRL). To date, general awareness or knowledge of the program is limited and the adoption rate by businesses is far below the government's expectations. The objective of this paper is twofold. First, it describes in detail the different components of SBR and provides a clear overview of how the components work together. Second, it examines the issue of SBR adoption in Australia using the diffusion of innovation (DOI) model and the technology, organization, and environment (TOE) framework. Results show that the most relevant factor in the DOI model is relative advantage. Compatibility does not appear to be a problem to businesses but complexity potentially is an issue. Moreover, enhancing trialability and observability can help promote SBR. In the context of the technological perspective in the TOE framework, perceived costs is an obstacle to SBR adoption as insufficient information is available. The quality of SBR reports has hardly been mentioned or discussed but it is an important factor for the long term success of the SBR. The most salient issue in the organizational perspective is the lack of awareness and expertise on SBR and XBRL among business managers and accountants. In the environmental perspective, there is an increasing pressure for SBR adoption but the external support to help businesses appears to be insufficient. The discussions in this paper provide useful information to managers and accountants on how the SBR components work together. The findings also provide specific recommendations to the government agency in charge of SBR to help the further development and adoption of the program.

Determinants of the voluntary adoption of digital reporting by small private companies to Companies House: Evidence from the UK

“…Therefore, there is no evidence to support H2 that the compatibility of the company's accounting system with the filing software positively influences the voluntary adoption of digital reporting by small private companies. This result is contrary to previous studies undertaken in New Zealand (Cordery et al, 2011), Australia (Azam andTaylor, 2013;Lim and Perrin, 2014) and the USA (Henderson et al, 2012). The most likely explanation for this is that these prior studies were conducted before using XBRL was so widespread and, today, the reason is that the Internet makes data exchange between XBRL technology and other information systems easier.…”

“…A survey by Henderson et al (2012) concludes the XBRL adoption requires both technical and accounting knowledge because the mapping process is complex and requires a company to choose the appropriate taxonomy and specific element in the taxonomy. Lim and Perrin (2014) confirm that the availability of technical expertise within a company can drive the company to using and understanding XBRL. Therefore, companies with the requisite expertise are more likely to adopt the innovation (Doolin and Troshani, 2007).…”

“…Previous research suggests that XBRL is more compatible with company's information system than PDF or Excel files, but companies should find an XBRL filing package that is compatible with its information systems (Dunne et al, 2009). However, companies that manage the XBRL filing process in-house may need to change their existing processes to accommodate the software (Lim and Perrin, 2014). We propose that compatibility of XBRL with company's information systems could make transferring data between different systems easier and thus reduce the need for substantial modification of the existing IT infrastructure.…”

“…Zhu and Kaemer (2005) confirm that the cost of technology is negatively associated with the open-standard IOS adoption. Lim and Perrin (2014) argue that the cost of purchasing of XBRL filing software, together with the training costs, could offset the benefits for early adopters. This supports earlier research in the UK by Dunne et al (2009) who conclude that the cost of commercial filing software is one of the major obstacles to the use of XBRL as businesses do not have the internal resources to undertake the training necessary to adopt digital reporting.…”

“…Doolin and Troshani (2007) confirm that top management support for adopting XBRL is important for companies since it could significantly change the way business is conducted. Lim and Perrin (2014) argue that management is unlikely to support XBRL unless they have some knowledge about this innovation. Dunne et al (2013) find that managers in the UK lack knowledge about the benefits and costs of XBRL technology.…”