Can XBRL Detailed Tagging of Footnotes Improve Financial Analysts' Information Environment?

Author(s)

Andrew J. Felo, Nova Southeastern UniversityFollow
Joung W. Kim, Nova Southeastern UniversityFollow
Jeehae Lim, University of Hawaii, ManoaFollow

ORCID

Andrew J. Felo0000-0002-8144-4353

Joung Kim0000-0001-5456-8820

Document Type

Article

Publication Title

International Journal of Accounting Information Systems

ISSN

1467-0895

Publication Date

3-2018

Abstract/Excerpt

In 2010 the SEC began requiring registeredfirms to provide detail-tagged footnote information inXBRL (eXtensible Business Reporting Language). As expected, the number of total tags soared dueto this requirement. This study investigates whetherfinancial analysts' information environmentimproved after this rule went into effect. It is possible that having footnote information detail-tagged reduces the cost to process footnote information. Ourfindings show that analysts' forecasterror and dispersion for the next quarter earnings estimates decreased after the SEC requirementwent into effect. We alsofind that the number of analysts followingfirms increased after man-datory detailed tagging was adopted. This is consistent with the notion that detailed tagging offootnote information reducesfinancial analysts' information processing costs. However, whenfirms use customized (as opposed to standardized) footnote tags, forecast error and dispersion areless likely to decrease. This suggests that regulators may need to limitfirms' ability to use cus-tomized tags. Last, our results suggest that the benefits of detail-tagged footnotes increases overtime as analysts become more comfortable with the information

DOI

https://doi.org/10.1016/j.accinf.2017.12.003

Volume

28

First Page

45

Last Page

58

NSUWorks Citation

Felo, Andrew J.; Kim, Joung W.; and Lim, Jeehae, "Can XBRL Detailed Tagging of Footnotes Improve Financial Analysts' Information Environment?" (2018). HCBE Faculty Articles. 1138.
https://nsuworks.nova.edu/hcbe_facarticles/1138