The requirements towards financial reporting (FR) have considerably changed within the last 15 years. Stakeholders demand not only accurate and reliable information in shorter intervals, but also customized reports meeting their information needs. Thus, companies need to develop strategies to cope with the new affordances of professional investor relations and stakeholder management. We conducted a survey among publicly listed Austrian firms, investigating whether they perceive a need to develop new reporting practices and if they have already started to deal with new sorts of reporting standards, especially XBRL. The survey examined the state of the art in XBRL diffusion and adoption among Austrian companies analysing supporting and inhibiting factors for its application and rejection. The results of the survey indicate a great awareness for the need of targetgroup oriented financial reporting and a high relevance of technical reporting standards in the future. However, Austrian firms show poor preparedness for the new technological requirements. It's probable that initiatives are needed to stimulate the adoption of the new technological standards and pave the way towards a next generation reporting.
1 INTRODUCTION
With the increasing proliferation of the Internet as a
universal medium for information exchange and
presentation the affordances of financial reporting (FR) of
publicly listed companies have changed. As various
stakeholders along the information value chain demand
more information in shorter intervals [
Over recent years, various business reporting standards
have been developed that among other things address the
reuse of financial data. The most comprehensive and
mature format is XBRL, the eXtensible Business Reporting
Language, an expressive XML-vocabulary optimized to
represent financial data at a highly granular level. XBRL
separates the presentation layer from the data contained in
it, and thus increases the usability of financial data for
purposes such as reporting, analytics and targeted
contextualisation. Dunne et al. [
This paper contributes to the increasing number of works investigating the diffusion of XBRL as an enabling technology for new reporting routines and practices. Several country-specific studies have already been provided (for details see sec. 2), but no attention has so far been paid to the adoption of XBRL in Austria.
To close this gap, we conducted a survey among publicly listed Austrian firms whether they perceive a need to develop new reporting practices and if they have already started to adjust to the new circumstances. Aside these general insights, the survey investigated the state of the art in XBRL adoption among Austrian companies, analysing supporting and inhibiting factors for its application and rejection.
The paper is structured as follows: Chapter 2 gives a brief introduction into XBRL, explaining its evolution and core features. Chapter 3 discusses related work dealing with the diffusion and adoption of XBRL and associated institutional setups. In chapter 4 the authors explain the survey’s methodology and present the survey results. Chapter 5 provides a discussion and conclusion.
Since 1999 the US based company XBRL International Inc.
has been standardising XBRL currently providing it to the
public under version 2.1. XBRL is a scripting language
based on XML “intended for modelling, exchanging and
automatically processing business and financial
information” [
Recently, new methodologies have been introduced to
further extend the expressivity of XBRL by enriching it
with other standardized vocabularies and data sources. This
so called Linked Data approach [16;7] is a profound
technological leap in the customization of financial reports
according to the specific needs of various target groups. As
noted by Guillox et al. [
Despite several efforts to establish XBRL as an
electronic reporting standard, its broad adoption is still in
its infancy and its impact is still subject to debate. In the
following sections we provide a comparison between the
United States of America and Europe according to
similarities and differences in the adoption of XBRL.
According to Kernan [
Baldwin & Trinkle [
Sinnet [
By analyzing the impact of XBRL on analyst forecast
behaviour Liu et al. [
Interestingly, Dhole et al. [
To overcome these obstacles various initiatives have
been launched at the national and international level to
promote the adoption of XBRL. At the international level
the European Committee of Central Balance-Sheet Data
Offices (ECCBSO) has established the ERICA working
group to monitor the usefulness of XBRL as a tool to
reduce the reporting burden for IFRS. The group is chaired
by the Banco de España and comprised of the following
members: Banco de Portugal, Banque de France, Banque
Nationale de Belgique - Nationale Bank van België, Cerved
Group spa - Centrale dei Bilanci, Banca d’Italia, Deutsche
Bundesbank, Oesterreichische Nationalbank, Bank of
Greece and the European Central Bank. In an activity report
from 2010 they come to the conclusion that “[...] the
European commitment to XBRL has meant the creation of
the XBRL Europe entity, with the aim of coordinating the
efforts of the different European XBRL jurisdictions.
Finally, some Central Balance Sheet Data offices belonging
to the Committee have developed and are continuing to
play a key role in the diffusion of XBRL as a new tool for
dissemination of financial information in their countries;
[...]” [
In 2007 Rodriguez et al. [
Guilloux et al. [
For the UK Dunne et al. [
This brief overview of the XBRL diffusion in the US
and Europe outlines a twofold scenario. On the one side, we
see various governmental initiatives that aim at stimulating
the adoption of XBRL as technical reporting standard, on
the other side awareness about XBRL exists, but the
voluntary uptake of XBRL by companies and their
stakeholders is lagging despite the multiple benefits of the
standard in fulfilling the requirements of a “second
generation reporting” [
The quantitative online survey was conducted among Austrian listed companies from January to February 2016. At the time, the Austrian stock exchange listed a total of 57 companies from which 39 (68%) were listed in ATX Prime, 9 (16%) in the Mid Market and 9 (16%) in the Standard Market. We received a total of 37 responses from which 25 responses were evaluable. Accordingly, the overall response rate was 44%. Since the survey focus results in a relatively small sample size, the methodological approach remains descriptive. The results presented and discussed here should be interpreted in the light of this fact. However, the research findings provide an overview comparable with international research and a basis for further studies.
The questions were derived from extant literature and reflect (1) the current role of financial reporting, the estimated trends in financial reporting, the relevance of technical reporting standards in the companies, and the challenges associated with the new requirements, (2) the diffusion and adoption of XBRL among Austrian listed companies, and (3) the reasons for and against the implementation of XBRL in companies and the promoting and inhibiting factors in this context.
The first section of the questionnaire covered demographic information such as the company size, stock market, industry, working area and management level of the respondents, and the role of financial reporting in the company. Table 1 provides some basic information regarding the sample structure and the frequency distribution in terms of demographic data. The second part of the questionnaire contained seven general questions that cover the expected development of financial reporting in the future (Table 2). Additionally, the respondents were asked how they estimate the relevance of technical reporting standards (Table 3) and which challenges they expect in the context of the implementation of new technical reporting standards (Table 4). The third section of the questionnaire examines the knowledge and adoption of XBRL among the Austrian companies and the level of expertise among the respondents (Table 5). This part is followed by detailed questions that address respondents who know and are more or less familiar with XBRL. This section covered two general questions on reasons for and against the implementation of XBRL and two further questions on advantages and disadvantages associated with the adoption of XBRL.
The following chapter explores the key research findings of the survey, detailing the estimated trends in financial reporting and technical reporting standards and the diffusion and adoption of XBRL among Austrian listed companies. 5. Role of FR within the company 5a. FR is used to fulfil the legal requirements only 3 (12.00) 5b. We plan to make FR an integral component of our communication strategy 5 (20.00) 5c. We established FR as a central component of our communication strategy 17 (68.00) Note: This table displays the frequencies regarding (1) the market, in which the companies are listed, (2) the industry, in which the companies are active, (3) the working area, (4) the management level of the respondents, and (5) the role of financial reporting within the company. 3.2. Research Findings 3.2.1. Estimated trends in financial reporting and the relevance of technical reporting standards The first section of the survey investigated the current role of financial reporting in Austrian listed companies. Table 1(5) demonstrates that for 68% of all companies, Financial Reporting (FR) plays a crucial role in the corporate communication and goes far beyond the fulfilment of legal requirements. Further 20% are aware of the strategic relevance of financial reporting and plan to make financial reporting an integral component of the company’s communication strategy. Only 12% of the respondents use financial reporting for fulfilling legal requirements only. Thus, for the majority of Austrian listed companies financial reporting is important not only in the communication to investors and regulators, but also to other stakeholders affected by the financial prosperity of a company such as employees, suppliers etc. There is a high level of awareness that financial reporting is a decisive factor in the relations between the company and its environment.
The second section examined the estimated trends in the context of financial reporting in the future. A vast majority of the respondents agree or fully agree that technical standardisation (92%) and automatization (84%) in financial reporting frequency will increase in the future. The need for a higher technical standardisation and automatization could result from the assumption that the need for financial information will increase in general (76%) and will have to be more personalized and targetgroup oriented (72%) which requires new forms of narration (76%) and presentation (72%) in financial reporting. Thus, managing the higher amount and complexity of financial reporting will be a new challenge for controlling, investor relations, public relations and IT departments. Automatization on top of new technical standards such as XBRL, seem to be the necessary applications to manage these upcoming affordances. Implementation of new technological reporting standards can be entailed with multiple challenges. Table 2 illustrates the corresponding frequency distribution.
The two main hurdles to the adoption of technical reporting standards seem to be related to staff and processes (Table 3). 88% of all respondents think that the education and training for staff in charge and the need of adjustment of existing workflows and reporting conventions are the two most important challenges. Thus, XBRL might be rather a challenge for HR, organisation and change management than for IT management. Another challenge for a sizeable portion of respondents (80%) is a technical issue concerning the data safety (low data volatility) and data security (controlled accessibility). Inestimable follow-up costs and the development of a new financial data policy seem to concern 36% of all respondents. Missing IT expertise consider 20% of all respondents a challenge. 3.2.2. Diffusion and adoption of XBRL among Austrian listed companies The third section was dedicated to the diffusion and adoption of XBRL. Generally speaking, 88% of all respondents estimate the relevance of technical reporting standards as high or very high. Table 4 illustrates the corresponding frequency distribution.
Despite the general awareness about the importance of technical reporting standards, the results indicate a poor knowledge of XBRL among Austrian listed firms. As illustrated in Table 5(1), a sizeable portion of the respondents (72%) don’t know XBRL at all. Only 7 out of 25 respondents (28%) know XBRL, whereas none of the respondents consider him- or herself an expert. The level of expertise among those who know XBRL is predominantly low (71.4%) or non-existent (14.3%). Only 14.3% describe their level of expertise as middle (Table 5(2)).
Considering the adoption of XBRL, the survey shows that XBRL has not been an issue of financial reporting practice at the beginning of 2016 (Table 5(3)). Only one company already reacted to the upcoming challenges and applies the new technical standard (14.3%). 28.6% of the companies are aware of the upcoming challenges and plan to adopt XBRL within the next 5 years. The vast majority of 59.2% is hardly aware of the requirements and possible solutions.
Table 5(3) illustrates that the respondents have neither concrete plans to adopt XBRL for the time being (42.8%) nor state that they will adopt XBRL at all (14.3%). Just one respondent has already adopted XBRL (14.3%). And just two respondents plan to adopt XBRL within the next five years (28.6%). Question n (%) 1. What were the reasons for the implementation of XBRL? (n=3) 1a. We deliberately decided to adopt XBRL 0 (0.00) 1b. We were forced to adopt XBRL 0 (0.00) 1c. XBRL came in the course of a technical upgrade 1d. XBRL was part new reporting routines 1e. Misc. reasons for XBRL adoption 2. What were the reasons against the implementation of XBRL? (n=4) 2a. No need for XBRL 0 (0.00) 2b. We use other standards (e.g. Edifact, ebXML) 0 (0.00) 2c. XBRL is no issue 4 (66.67) 2d. Implementation costs 1 (16.67) 2e. Immaturity of the technology 1 (16.67) 2f. Missing expertise 0 (0.00) 2g. Security issues 0 (0.00) 2h. Misc. reasons against XBRL adoption 0 (0.00) Note: This table displays the frequencies regarding (1) the reasons for and (2) reasons against the implementation of XBRL among respondents who (1) know XBRL and has already adopted or plan to adopt XBRL within the next 5 years (n = 3) and (2) know XBRL and have no plans to adopt XBRL (n = 4).
From the latter three respondents, no company adopted XBRL deliberately (Table 6(1)). If XBRL was adopted, then as part of new reporting routines or in the course of technological upgrades. The intention to improve financial reporting to and communication with stakeholders doesn’t seem to have played a role at all. Thus, the adoption of XBRL does not seem to be the result of a new communication culture, but rather a technical issue. Despite the low adoption rate, no special inhibiting reasons could be identified (Table 6(2)). XBRL is rather not an issue at all (66.67%) or doesn’t seem to be a mature technology (16.67%). 3.2.3. Awareness of the benefits and barriers of the adoption of XBRL In the last phase we compared the perceived benefits and obstacles of XBRL between those respondents who have adopted or plan to adopt XBRL, and those respondents who know XBRL but have no concrete adoption strategy yet (Table 7).
The three respondents who know XBRL replied that reusability and comparability of financial data, higher flexibility and analytical capabilities, and decrease of processing errors are seen as the main advantages of XBRL. Further benefits of the new technology that were recognized by the respondents are decrease of reporting costs, improved data portability between data systems, improved findability of the data, acceleration of data processing and reporting processes, and miscellaneous. Trustworthiness of the data source or improved data portability between data systems are not considered an advantage at all. A considerable portion of respondents see the additional costs to occur as the main drawback, whereas for some the implementation costs are expected to be the greatest strain, followed by the cost of XBRL-software and additional training costs for employees. Further disadvantages seen by the respondents are security issues, complexity of XBRL and disruption of reporting routines. Missing software tools or volatility of XBRL are not seen as disadvantages at all. 25% of respondents see also other, not specific aspects as disadvantages of XBRL.
On the contrary, the four respondents with no specific
adoption plans perceive the comparability of financial data
as the main benefit. Obstacles are implementation costs,
additional training demand for employees and costs for
XBRL software.
4. DISCUSSION AND CONCLUSION
The survey results correspond with the findings of research
conducted in the US and other European countries in the
recent years. The situation among Austrian listed
companies doesn’t differ significantly from other countries
and stock markets. Moreover, the survey results confirm the
general lack of knowledge about XBRL which stands in
contradiction to the great awareness for the need of
targetgroup oriented financial reporting and high relevance of
technical reporting standards in the future. This finding is
surprising and worrying with respect to the length of time
XBRL has been a topic of discussion among researchers
and governmental and professional entities. Only one third
of all respondents know XBRL, whereas XBRL has been a
topic of the AICPA, the SEC, the IASB, and other major
entities since 2004 and experts think that we reached the
tipping point toward the use of XBRL [
Another fact confirmed by the survey is that private initiatives to implement XBRL hardly exist and can’t be expected. If new information technologies should be adopted for more accurate, reliable and customized financial reporting, external initiatives seem to be necessary to enhance the adoption of XBRL in private companies.
Neglecting the demand for new reporting standards with respect to customized financial information provided by new technical standards such as XBRL might weaken a company’s position in the stock market and in the public perception. The high share of international investors in the Austrian stock market might even amplify the negative aspects on not adopting XBRL and a new reporting culture. International investors compare reporting standards in an international context and tend to prefer companies and stock markets that answer investors’ and stakeholders’ demand for new financial reporting standards. However, reacting to these new affordances means in the current environment a strategic advantage and could strengthen the company’s position and enhance its value.