Quality Of CAS Taxonomy Evaluation And Improvement

Online Financial Reporting has become an important subject of accounting research. With the development of information technology, Online Financial Reporting is experiencing a progress from traditional to the advanced stage. If people want to use financial data in traditional reports delivered by PDF or HTML, etc, they need to collect and organize data manually first, which lead inefficiency and the increasing of human’s mistake. In the big data era, XBRL was invented because of higher demanding of financial information.After more than ten years of efforts, China XBRL system has been noticed. October19,2010, Chinese Ministry of Finance and the National Standardization Management Committee jointly issued XBRL specification national standards and CAS Taxonomy. January1,2011,15companies and12CPAs started to pilot implementation. Taxonomy is a bridge between specifications and XBRL financial reports. Its quality will directly affect the quality of XBRL financial reports. Ministry of Finance Accounting Division stressed that an important goal of pilot implementation is establishing and improving XBRL taxonomy system, and revising taxonomy in order to meet the needs of financial reporting. Therefore, quality evaluation and improvement of CAS Taxonomy is important to promote the application of XBRL financial reports.Now, China has issued three national basic taxonomies:Electronic Information Disclosure specification of Listed Companies, Chinese Listed Company Information Disclosure (CLCID), CAS Taxonomy. As a new taxonomy, CAS Taxonomy has been greatly improved in the structure compared to the previous standards. Taxonomy structure includes the physical structure and logic design. Physical structure refers to the organization of each document folder and documents in a folder. Logic design refers to the methods of mapping financial information on XBRL language.Compared with other taxonomies, CAS Taxonomy includes IFRS Taxonomy’s schema which makes CAS Taxonomy convergent with international taxonomy. CAS Taxonomy also introduces the dimension module for the use of dimensional modeling. In logic design, the accounting standards and other normative documents which CAS Taxonomy based are more updated, so that it can better meet the needs of the disclosure practice. Besides, CAS Taxonomy defines the hierarchical relationship of elements by dimensional modeling, which makes a great improvement on modeling efficiency and extensibility.Standard method and practice method are two ways of extracting elements from financial reports. CAS Taxonomy was established by standard method, which extracts financial information elements based on the existing accounting standards, norms and corporate financial disclosure rules. Standard method may lead the applicability problem in financial reporting practice.Therefore, this paper will also focus on applicability evaluation on CAS Taxonomy. Applicability reflected in both integrity and efficiency. Integrity is quantified by Elements Expansion Rate, and efficiency is quantified by Elements Utilization Rate. In accordance with the "Guidelines on Industry Classification of Listed Companies", this paper divided the listed companies into13major industries. Except financial industry, we select120listed companies as samples, and match balance sheet and income statement’s items in PDF annual reports with elements defined in CAS Taxonomy. The result shows that, overall average Elements Expansion Rate is26.52%. The industry average Elements Expansion Rate ranged from22.53%to33.06%. The balance sheet Elements Expansion Rate with an average of24.21%and the average Elements Expansion Rate of the income statement is35.63%. As for the efficiency, the overall Elements Utilization Rate is25.12%. The industry average Elements Utilization Rate ranged from18.17%to27.79%. The average standard Elements Utilization Rate of the balance sheet is24.19%, and the average standard Elements Utilization Rate of the income statement is31.44%. Compared with high utilization rate elements, there are more medium and low utilization rate elements. In concluding, the integrity and efficiency are both inadequate.Therefore, this paper will propose some suggestions on the applicability of CAS Taxonomy. We usually improve integrity by element extension. There are three models of element extension:(1) Company Extension;(2) Unified Extension and Company Extension;(3) Industry Extension and Company Extension. Except for Company Extension model, they all involves expanding CAS Taxonomy itself. We use data to test the extension taxonomy, the result shows that, compared with CAS Taxonomy, extension taxonomies are improved on both integrity and efficiency.There are many low utilization rate elements in CAS Taxonomy, and they will make much trouble on accurate element selection. At last, we suggest three approach to solve this problem:develop internal taxonomy, strengthen personnel business training, and strengthen cooperation with CPAs.The main conclusions of this paper are:(1) Compared with other taxonomies, CAS Taxonomy has been greatly improved on structure;(2) CAS Taxonomy is still inadequate in applicability, in particular, its integrity and efficiency is not high enough;(3)Adding high utilization rate elements to CAS Taxonomy, can improve both the integrity and efficiency.The innovation of this paper may be as follows:(1) Novel study. As a combination of accounting and computer, XBRL has an extensive research scope, but few studies related to quality assessment on taxonomy, and this paper may have some implications for future relevant research.(2)Specific description of dimensional modeling.(3) Compare CAS Taxonomy with Electronic Information Disclosure specification of Listed Companies and Chinese Listed Company Information Disclosure (CLCID). AS the newest basic taxonomy in china, CAS Taxonomy has been greatly improved on structure.(4) Propose the suggestion that unifying element extension by similar industries based on the cost-effectiveness.