The Influence of XBRL Adoption on Financial Reporting Timeliness: Evidence from Indonesian Banking Industry

Abstract

This study examines the impact of eXtensible Business Reporting Language (XBRL) adoption on financial reporting timeliness. The population are banking companies listed on the Indonesian Stock Exchange (IDX) between 2015 and 2019. The samples are 38 Indonesian banks or 190 bank-year observations. Using logistic regression this study demonstrates the XBRL adoption positively affects financial reporting timeliness. The findings confirm that XBRL adoption benefit banks as it stimulates automation process, improves cost-effectiveness, fasten data collection, enhances data reliability and accuracy, and thus it may lead to better business decision-making. The positive signal provided by the adopters of XBRL will influence the decisions of shareholders, which in turn will lead to share ownership increase.

The Influence of XBRL, Independent Commissioner, Management Ownership, and Operation Complexity on Timeliness of Financial Reporting: Evidence from Indonesian Energy Sector

“…Proceedings of the 5 th European International Conference on Industrial Engineering and Operations Management Rome, Italy, July 26-28, 2022© IEOM Society InternationalThis result is in line with researches fromLestari et al (2021) andAksoy et al (2021) which prove that XBRL format in financial reporting increase the timely submission of financial reports.…”

“…Prior researches from Lestari et al (2021) and Aksoy et al (2021) claim that XBRL format in financial reporting increase the timely submission of financial reports. Nevertheless, another research from Rao and Guo (2021) found that XBRL format in financial reporting not improve the timely submission of financial reports.…”

هل یؤدی التطبیق الإلزامی لـ XBRL إلى تحسین جودة الأرباح المبلغ عنها؟ دراسة تطبیقیة على الشركات المدرجة فی سوق الأوراق المالیة السعودیة(باللغة الانجلیزیة)

“…XBRL adoption has several advantages over traditional reporting formats such as PDF or HTML; reduced information asymmetry (Tzu-Yi, Fengyi, Shih-Hsuan, & Kwo-Liang, 2016; Kim, Kim, & Lim, 2019), enhances the reliability and accuracy of financial information (Alsharayri & Al-Arabiat, 2021;Lestari, Putri, & Devi, 2021), present both financial and non-financial information under a single financial report (Ashoka & Abhishek, 2018), and improve consistency, relevance, reliability, and transparency in financial reporting (Wang, 2015;Ashoka & Abhishek, 2018;Kim, Kim, & Lim, 2019).…”

“…Early empirical evidence has documented mixed results regarding the impact of XBRL adoption on the stock market. Some studies suggest that mandatory XBRL broadens the investor base or ownership (Kim, Kim, & Lim, 2019;Lestari, Putri, & Devi, 2021), boosts investor confidence and revitalizes the stock market, and ensures access to efficient and competitive capital market (Benbouali & Berberi, 2018), improves forecast quality (Burd, 2022), and reduces cost of equity (Tohang & Lusiana, 2022).…”

“…Second, XBRL improves the quality of financial reporting through enhancing three main attributes of financial reporting: (1) relevance through search facilitation technology; (2) understandability through providing definitions of accounting concepts; (3) and comparability through a single, universally accepted format (Birt et al, 2017). Third, XBRL reduces costs that investors need due to its higher reporting quality and lower errors (Tohang & Lusiana, 2022;Lestari et al, 2021).…”