THE IMPACT OF XBRL FILINGS TOWARDS INFORMATION ASYMMETRY: A COMPARISON BETWEEN MANDATORY AND VOLUNTARY XBRL IMPLEMENTATION

Abstract

XBRL (eXtensible Business Reporting Language) is designed for communicating business reports to all stakeholders (Wang, Wen, & Seng, 2014; Yoon, Zo, & Ciganek, 2011). The number of public XBRL disclosures is showing an increasing trend, and it is the first time the majority of countries around the world are adopting the same standards for their financial reporting technology, showing that XBRL has the potential to be a global standard for disclosures that will assist information transfer across countries. This research aims to analyze the adoption of XBRL across countries towards information asymmetry, by providing an extension of the existing research in this particular area. Further adding to the essence of the research, this paper will take into account the different levels of disclosure quality in each country and the supremacy of regulatory bodies within each country. The results of this cross-country analysis are expected to be different as determined by the XBRL reporting environment, hence affecting different levels of information asymmetry.