Proceedings

THE INFLUENCE OF FIRM-SPECIFIC
CHARACTERISTICS ON THE EXTENT
OF VOLUNTARY DISCLOSURE IN XBRL:
AN EMPIRICAL ANALYSIS OF SEC FILINGS
Devrimi KAYA 1
University of Erlangen-Nuremberg, Germany
ABSTRACT
eXtensible Business Reporting Language (XBRL) is an open standard for the electronic
preparation and exchange of business information. The purpose of this paper is to empirically
investigate the influence of several firm-specific characteristics on the extent of voluntary
disclosure in XBRL. I define voluntary disclosure in XBRL as being an offer of information,
whether financial or non-financial, in a new format via the SEC’s Voluntary Filing Program
(VFP) in addition to official 10-K and 10-Q filings. The extent of voluntary disclosure is
measured by a disclosure index with 54 financial and non-financial items. Based on a sample
of 51 U.S. listed firms, this study states that the extent of overall disclosures is significantly
and positively related to firm size and the firm’s level of innovativeness. Moreover, the results
of the study indicate that different factors are important in explaining the voluntary
disclosures of financial, non-financial, and general information. The findings of this study
should be of interest to firms that prepare, consumers that use and regulators that monitor
financial reporting disclosures.
KEYWORDS: Financial Reporting, Voluntary Disclosure, XBRL, Annual Reports, U.S.
stock exchanges, SEC
INTRODUCTION
In times of an incredible volume of information in annual reports, it is becoming
difficult for users to analyze all the information. A relatively new technology called
eXtensible Business Reporting Language (XBRL), an XML-based data standard, is a
system for tagging information which is exchanged electronically so that it can be
given contextual meaning in the systems of those receiving it, e.g. banks, regulators,
and investors (Wagenhofer 2003). XBRL provides an increase in standardization and
comparability of available financial and non-financial information (Baldwin et al.
2006). The Securities and Exchange Commission (SEC) adopted rule amendments
(33-8529) establishing the XBRL Voluntary Financial Reporting Program (VFP) on
the EDGAR System on March 16, 2005 (SEC 2005). These amendments enable
voluntary filers to furnish XBRL documents on EDGAR additionally to official
filings such as 10-K and 10-Q. In January 2009, the SEC then announced rule 33-
9002, which requires corporations to file their financial statements in XBRL with the
requirement being phased-in over three years (SEC 2009). From quarters ended June
1 Correspondence address: Devrimi KAYA, University of Erlangen-Nuremberg, Department of
Accounting and Auditing; email: devrimi.kaya@wiso.uni-erlangen.de
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