Research On Application Of XBRL-Based Financial Reporting In China

ABSTRACT:The development of information technology has changed the environment where modern enterprises sit in greatly. Among these changes, we should attach higher importance to the fact that multiple formats are being adopted to report the financial statements, such as PDF, HTML, WORD, etc. These incompatible formats hinder users from extracting and analyze the data, making exchange and reuse of data less efficient. As a result, the flow of data within the enterprise and in-between the enterprise and its regulator have reached a bottleneck.In order to resolve this issue, American Institute of Certified Public Accountants (AICPA) proposed a freely available global standard, eXtensible Business Reporting Language (XBRL) to realize the timely, precise, efficient and economy process and sharing of financial and non-financial data.The construction and application of XBRL is a crucial process of the informatization of China’s accounting system through which we can gradually implement the standardization of financial information so as to build an open and shared platform to provide, extract, transmit, store, exchange, analysis and compare financial data. Whilst, China is still at the starting line of the XBRL exploration, neither are we proficient in its theoretical research nor its practical application.Taking this opportunity, this article depicts an overall picture of the present situation of the application of XBRL in China. Not only does this article analyze XBRL’s influence towards accounting information quality from the four quality properties, which is, reliability, relativity, comparability and comprehensibility, but also researches regarding the advantages and disadvantages of XBRL in China from both the regulator’s view and the enterprise’s view. In the end of the article, it describes a case study towards a listed enterprise by comparing its XBRL and PDF format financial statements’ quality, then marked its XBRL standard financial statements for the five most recent years.The article reckons that XBRL has unique advantages in improving the quality of accounting information, especially, the regulators would welcome and benefit from the wide application of XBRL financial statements. Apart form that, the quality of XBRL standard financial statement is also improving gradually year by year. The enforcement of the XBRL standard financial statement is also stimulating the quality of the traditional PDF financial statement. Although, from the overall research on XBRL standard financial statement, it is not mature and quality-stable enough to completely replace PDF as the statutory financial statement format, we can still predict its bright prospect in information exposure and enterprise internal management due to the massive convenience it brings to data reuse, data sharing and data analysis.