The Effects of XBRL on Financial Transparency

A. Ahmadpour, A. Bodaghi

Abstract


Extensible Business Reporting Language (XBRL) is an XML-based open standard, developed specifically for financial reporting. In wider terms, XBRL is a technology by which directed searches and simultaneous presentation of related financial statement facilitate, and also footnote information could potentially help financial statements’ users. The use of search-facilitating technology depletes differences in nonprofessional investors’ financial performance judgments and investment decisions created by recognition versus disclosure; accordingly, it could not be wrong to conclude that search-facilitating technology broadly improves the transparency of firm’s financial information. Financial statements in XBRL format bring users of financial reports the opportunity that provides them with directly search for relevant information regardless of the information’s location and to conveniently compare related information among different companies. All in all, XBRL can reduce unreliability of financial information for firms and help them to minimize the minus effect of nondeterministic decisions based upon financial statements’ information.


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E-ISSN: 2008-8310

   ISSN: 2008-8302