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This paper examines the relationship between intensity of company-specific XBRL extension usage and the three stages of the financial reporting supply chain: information production, verification, and usage. Firms create company-specific XBRL extensions in their filings when they feel that SEC-provided tags are not appropriate. We find that more intense use of these tags is positively associated with internal control weaknesses, delayed earnings announcement, analyst dispersion, and analyst following. Consistent with the lack of an audit mandate, however, we do not find any relationship between these extensions and audit characteristics such as fees and audit lag. Overall, our results suggest that use of company-specific extensions is associated with a poor quality information production environment and a more challenging disclosure environment for investors.
W. Robert Knechel, University of Florida
James D. Vincent, University of Florida
Devin Williams, University of Florida