Initial Effects of Mandatory XBRL Adoption across the Indonesia Stock Exchange`s Financial Information Environment

Abstract

This research aims to investigate the initial effects of mandatory eXtensible Business Reporting Language (XBRL) across the Indonesia Stock Exchange's financial information environment. Financial information environment is measured by event return volatility, absolute cumulative abnormal return, change in standard deviation of returns, abnormal bid-ask spread, and abnormal trading volume. Comparing the effects of pre-and post-XBRL period, we provide evidence that there is no significant implication in the first year of XBRL adoption. It is showed that event return volatility, changes in the standard deviation of returns, and abnormal bid-ask spread was not reduced in the post-XBRL period. On the other hand, it was able to intensify the stock trading volume which noted by the increased abnormal trading volume after mandatory XBRL policy was enacted.

A Decade of XBRL Research in Accounting in Indonesia: A Literature Study

“…In Indonesia, at the beginning of the implementation of XBRL, evidence was found that XBRL had not had a significant effect yet on improving the quality of the financial information environment (Zamroni and Aryani, 2018). Furthermore, the XBRL adoption also did not affect reducing information asymmetry (Tohang et al, 2020), even it had a positive effect in increasing information asymmetry (Jayani et al, 2020).…”

“…After observing each selected article by following the XBRL research theme classification guidelines provided by Perdana et al (2015) using XBRL research samples in the international sphere, the results of XBRL research theme classification in Indonesia generally have the same research theme cluster, i.e., i) The influence of XBRL on Business (see, e.g., Jayani et al, 2020;Junus and Irwanto, 2021;(Mahardika andHarahap, 2018) Mayapada, et al, 2020;Pamungkas and Kristanto, 2019;Prasetyo and Apandi, 2019;Saputro and Achjari, 2020;Tohang et al, 2020;Zamroni and Aryani, 2018); ii) Adoption of XBRL (see, e.g., Muchlis et al, 2019); iii) XBRL Engineering Development (see, e.g., Wijanarko and Moedjiono, 2015); and iv) XBRL education such as XBRL teaching and XBRL integration into the accounting curriculum (see, e.g., Wulandari and Ali, 2019;Pujisari and Biyanto, 2019). Table 4 explains the definition and scope of each theme.…”

“…The Indonesian Journal of Accounting Research -May, Vol. 24, No.2, 2021 the sub-cluster of the influence of XBRL in accounting and corporate governance, there is information related to earnings management, information asymmetry, financial information environment, and information risk (see, e.g., Mayapada et al, 2020;Pamungkas and Kristanto, 2019;Tohang et al, 2020;Zamroni and Aryani, 2018), on XBRL sub-cluster in auditing (see, e.g., Saputro and Achjari, 2020), and in the XBRL sub-cluster on the factors of decision-making or related to market reaction (see, e.g., Jayani et al, 2020;Junus and Irwanto, 2021).…”

“…The benefits of the presence of XBRL were felt both internally and externally by parties that use XBRL directly for reporting, including accountants and consultants, as well as by parties that utilize and have the interest in the financial statements of related companies such as data aggregators, analysts, standards boards and regulators, and also software developers (Bonson, 2001). Furthermore, XBRL is the embodiment of the universality of data language, so communication between users and companies, companies and companies to regulators, is interactive without interruption using different system platforms (Zamroni and Aryani, 2018). In the background, to meet the needs of businesses with the utilization of the format below is a detailed explanation of how XBRL influences business processes and activities in Indonesia.…”

Earnings Management in the Pre and Post eXtensible Business Reporting Language Period in Indonesia

“…Meanwhile, Indonesia has just started designing XBRL taxonomy in 2013. However This phenomenon increases the studies of the issue regarding the mandatory adoption of XBRL, especially in Indonesia, which implemented XBRL in a short time (Zamroni & Aryani, 2018).…”