Paper Info
Title
Can XBRL detailed tagging of footnotes improve financial analysts' information environment?
Abstract
In 2010 the SEC began requiring registered firms to provide detail-tagged footnote information in XBRL (eXtensible Business Reporting Language). As expected, the number of total tags soared due to this requirement. This study investigates whether financial analysts' information environment improved after this rule went into effect. It is possible that having footnote information detail-tagged reduces the cost to process footnote information. Our findings show that analysts' forecast error and dispersion for the next quarter earnings estimates decreased after the SEC requirement went into effect. We also find that the number of analysts following firms increased after mandatory detailed tagging was adopted. This is consistent with the notion that detailed tagging of footnote information reduces financial analysts' information processing costs. However, when firms use customized (as opposed to standardized) footnote tags, forecast error and dispersion are less likely to decrease. This suggests that regulators may need to limit firms' ability to use customized tags. Last, our results suggest that the benefits of detail-tagged footnotes increases over time as analysts become more comfortable with the information.
Year
DOI
Venue
2018
10.1016/j.accinf.2017.12.003
International Journal of Accounting Information Systems
Keywords
Field
DocType
XBRL (eXtensible business reporting language),Financial statement footnotes,Financial analysts,Information environment
Earnings,Information processing,Computer science,Information environment,Forecast error,XBRL,Finance,Business reporting
Journal
Volume
ISSN
Citations 
28
1467-0895
0
PageRank 
References 
Authors
0.34
6
3
Name
Order
Citations
PageRank
Andrew J. Felo100.34
Joung W. Kim21125.32
JeeHae Lim316513.29