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Title: The implications of second-generation digital reporting for corporate governance and accountability
Author: Cobb, George S.
Awarding Body: University of Dundee
Current Institution: University of Dundee
Date of Award: 2008
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Digital Reporting has been defined as: "The electronic process of recording, processing and distribution of financial and other business reports" (lCAEW, 2004, p. 2). The ICAEW distinguish between two levels of digital reporting. The first-generation (Level 1) of digital reporting concentrated on the efficient dissemination of information via the Internet (ICAEW, 2004). The second-generation (Level 2) of digital reporting aims to standardise the framework and enhance the context of information provided to stakeholders in order to facilitate greater levels of interrogation of the underlying information across multiple platforms (lCAEW, 2004). eXtensible Business Reporting Language (XBRL), a mark-up language based on a subset of eXtensible Mark-up Language (XML), has emerged as the leading technical standard to facilitate this standardisation (Willis, 2003). The XBRL framework is currently being developed by a wide consortium of organisations and companies, including professional accountancy bodies, software houses and a number of large listed companies in the US and Europe (XBRL, 2007a). However, it is not yet known how useful the technology will be for financial reporting purposes and in the discharge of accountability to stakeholders. Therefore, this thesis sought to gain an insight into the development of digital reporting and XBRL from the perspective of three key stakeholder groups (auditors, preparers and users of financial reporting information). In particular, the focus of the research was on the ability of digital reporting to play a role in the development of accountability and corporate governance relationships. Currently there are very few adopters of XBRL, and as a result the level of engagement and research on this topic conducted to date is limited. However, the potential wide-scale adoption by organisations would have major implications for corporate governance mechanisms and external accountability relationships. Thus, before the take-up of this new technology was widespread, exploration of key issues associated with XBRL was vital and timely. This thesis therefore reports the results from a series of twenty five interviews with three key corporate stakeholder groups and the findings from an explanatory case study of one of the few adopters in order to outline the links between the extant normative theoretical literature and the current practices of digital reporting. The results suggest that: • The major drive of the technology will likely be from the regulators who can capitalise on the benefits from standardisation more rapidly than organisations. • The benefits found with regard to corporate governance mechanisms and accountability relationships are present, but only at the margin until further developments are made in the reporting technologies. • Companies are not being persuaded by the normative benefits or "Business Case" highlighted in the current XBRL literature and will require further evidence of real world benefits before a willingness to engage emerges. In summary, the knowledge of XBRL and its capabilities within organisations to make an informed decision was too limited and there is a need for research in this area to link the theoretical advantages outlined in the literature, which continues to grow, with the practice of organisations adopting digital reporting and XBRL.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available