XBRL, Excel or PDF? The Effects of Technology Choice on the Analysis of Financial Information

70 Pages Posted: 14 Jan 2011

See all articles by Diane Joyce Janvrin

Diane Joyce Janvrin

Iowa State University - Department of Accounting and Finance

Robert E. Pinsker

Florida Atlantic University

Maureen Mascha

Marquette University

Date Written: January 14, 2011

Abstract

Proponents argue that financial statements created using eXtensible Business Reporting Language (XBRL) will provide more transparent data for users performing financial statement analysis. The more transparent data will simplify the analysis task and allow users to focus quicker on the financial information they perceive as important. However, U.S. adoption of XBRL-enabled technology has been slow and several standard setters and academics question whether investors will choose to use the XBRL-formatted information the Securities and Exchange Commission (SEC) is now requiring companies to provide. Further, the extant choice literature documents several instances where technology created for a specific purpose was not chosen by the intended users. Therefore, our study examines (1) whether users of financial information (investors) will choose XBRL-enabled technology for financial statement analysis rather than more familiar technologies (i.e., portable document files (PDF) and spreadsheets (Excel)) and (2) why they choose the specific technology.

We train participants using all three technologies and then ask them to choose one to complete an investment decision task. We found 58 percent of participants chose to use XBRLenabled technology, while 42 percent chose Excel. Our analysis suggests that nonprofessional investors’ chose XBRL-enabled technology because they perceive that it reduces the time required to complete the task (increases task efficiency). Conversely, nonprofessional investors who chose Excel made their choice based on greater experience with Excel relative to XBRLenabled technology and PDF. Finally, two factors that we hypothesized may explain technology choice, perceived usefulness and perceived ease of use, were not statistically significant. Our findings have implications for technology choice theory development, regulators mandating or considering mandating XBRL-based reporting, and XBRL-enabled technology adoption.

Keywords: XBRL adoption, technology choice

JEL Classification: M41

Suggested Citation

Janvrin, Diane Joyce and Pinsker, Robert E. and Mascha, Maureen, XBRL, Excel or PDF? The Effects of Technology Choice on the Analysis of Financial Information (January 14, 2011). CAAA Annual Conference 2011, Available at SSRN: https://ssrn.com/abstract=1740249 or http://dx.doi.org/10.2139/ssrn.1740249

Diane Joyce Janvrin (Contact Author)

Iowa State University - Department of Accounting and Finance ( email )

College of Business
Ames, IA 50011-2063
United States

Robert E. Pinsker

Florida Atlantic University ( email )

Boca Raton, FL 33431
United States

Maureen Mascha

Marquette University ( email )

P.O. Box 1881
Milwaukee, WI 53201-1881
United States

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