The Impact of Outsourcing Decision on Quality and Timeliness of Financial Reporting

• In Event: Financial Accounting and Reporting 9

Abstract

This paper examines the impact of preparer-side XBRL filing decision on the quality and timeliness of financial disclosures. Specifically, the choice between in-house and outsource preparation is used as the setting to examine the filing decision. Using annual and quarterly SEC XBRL filings, we test the quality and timeliness by comparing the reporting delay and amendments of the firms’ XBRL filings that are prepared by a third-party relative to those prepared in-house. Our results indicate that the decision to outsource XBRL filings increases the reporting quality but decreases the timeliness of financial disclosures.

Authors

• Yu Cong, Morgan State University

• Ayishat Omar, Morgan State University

• Huey-lian Sun, Morgan State University