The XBRL Mandate and Timeliness of Financial Reporting: Do XBRL Filings Take Longer?

• In Event: Research in Financial Accounting

Abstract

This study examines the impact of the Securities and Exchange Commission (SEC)’s XBRL (eXtensible Business Reporting Language) mandate on the timeliness of financial reporting, measured by the reporting lag between fiscal period end and filing date. Using annual and quarterly filing data from 1996 to 2013, we test the timeliness by comparing the time companies take to file XBRL reports with the time they take to file non-XBRL reports. Our results show that on average the reporting lag is reduced by two to five days when companies file their annual reports using XBRL and the average reporting lag when filing quarterly reports is reduced by one to three days, indicating that XBRL filings reduce the length of filing lags and thus improve the timeliness of financial reporting. We provide the first large-sample empirical evidence that financial reporting timeliness is improved after the SEC’s mandate of interactive data reporting. Our findings suggest that XBRL helps enhance financial reporting efficiency by increasing the speed of financial disclosure.

Authors

• Hui Du, University of Houston-Clear Lake

• Kean Wu, Rochester Institute of Technology