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

Author

Listed:
  • 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.)

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.

Suggested Citation

  • Songsheng Chen & Jun Guo & Qingqing Liu & Xiaoxiao Tong, 2021. "The impact of XBRL on real earnings management: unexpected consequences of the XBRL implementation in China," Review of Quantitative Finance and Accounting, Springer, vol. 56(2), pages 479-504, February.
    • Handle: RePEc:kap:rqfnac:v:56:y:2021:i:2:d:10.1007_s11156-020-00900-1
    DOI: 10.1007/s11156-020-00900-1
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    References listed on IDEAS

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    More about this item

    Keywords

    XBRL; Real earnings management; Technology; Risk aversion;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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