Systems Integration

Determinants of Data Quality of XBRL Filing

Swetha Swarna
023688517
National University

Systems Integration

XBRL is Extensible Business Reporting Language. It is a language used for the standards based
electronic communication of financial and business data. XBRL is considered as the subset of the
new programming language of the internet, Extensible Markup Language (XML). The SEC in
January 2009, mandated that all public organizations should submit their filings in XBRL after
the experience with the voluntary filing program. The purpose of the paper is to portray the
XBRL mandatory filings by reporting its progress and deficiency.
According to the book, XML data directly goes into a database from a web page without
passing through middleware. Thus, reducing the errors. HTML defines the look of the data such
as coloring, text styles, and placement of graphics among others. XBRL reports are processed
much faster because of the imbedded tags which directly represent a database. Greater
transparency of reporting is done through XBRL.
According to the paper, XBRL filings tend to have less number of major errors and more
number of minor errors. The XBRL deficient filings had higher percentage of extensions and are
filed by big companies from earlier years. Extensible Business Reporting Language increased the
transparency in companys financial statement information by making continuous reporting
feasible. According to Debreceny et al. based on the quarter filings of the 400 large corporations,
reported that major cause of the errors was inappropriate treatment was because of the debit or
credit assumptions in taxonomy.
The determinants of internal control quality are classified into two types: firm (filer)
characteristics related factors and filing characteristics related factors. Under the firm (filer)
characteristics related factor, first determinant is the participation in VFP. The VFP participants
had higher quality of XBRL reporting quality. Second determinant is the characteristic of the
firm and its complexity. The firms with large size and foreign transactions are more likely to

Systems Integration

have XBRL reporting errors. The third determinant is the financial health of the company. Loss
is used as the measure of the financial health. Companies with poor performances provide
inadequate resources for control implementation. The fourth determinant is the companys
business stability. The companies with extreme sales growth and restructuring tend to have more
XBRL errors.
The first determinant of the filing characteristic category is percentage of XBRL
extensions in a filing. More extensions in the filing, more number of errors. The second
determinant factor is the filing form. A firm spends more time in filing 10-K form in comparison
with 10-Q form. Therefore 10-Q is expected to have more number of errors. The other two
determinants are related to time. As the time passes by the filings gets better with less number of
errors.
Based on the type of error performed XBRL Cloud EDGAR Dashboard classified various
types of errors into two divisions: major errors and minor errors. The XBRL filing tools are
becoming more advanced and smarter to detect minute errors and suggest corrections. Majority
of filings are now done by professional SEC filing companies reducing errors in the filings.
These are the various determinants of data quality of XBRL filing according to the paper and the
book.

Systems Integration

4
References

Monk, E. & Wagner, B. (2009). Concepts in Enterprise Resource Planning (4th Ed). Boston,
Course Technology Cengage Learning.