The impact of XBRL on real earnings management: unexpected consequences of the XBRL implementation in China

Songsheng Chen (), Jun Guo (), Qingqing Liu () and Xiaoxiao Tong ()
Additional contact information
Songsheng Chen: Beijing Institute of Technology
Jun Guo: The State University of New Jersey
Qingqing Liu: Beijing Technology and Business University
Xiaoxiao Tong: Founder Securities CO., Ltd.

Review of Quantitative Finance and Accounting, 2021, vol. 56, issue 2, No 4, 479-504

Abstract: Abstract In this paper, we investigate whether there is a change of real earnings management for firms facing pressures of the new technology implementation of eXtensible Business Reporting Language (XBRL). We find that real earnings management increases after the implementation of XBRL in China, especially under the dual regulation of XBRL policies from two regulators (China Securities Regulation Committee and Ministry of Finance). Given the long term detrimental effect of real earnings management on firm value, this could be unexpected consequences of XBRL technology in emerging market. Furthermore, state-owned enterprises and non-state-owned enterprises behave differently under the dual regulation of XBRL policies.

Keywords: XBRL; Real earnings management; Technology; Risk aversion (search for similar items in EconPapers)
JEL-codes: M41 M48 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11156-020-00900-1

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