Does Digital Business Reporting, XBRL, Regulate Financial Reporting Quality in Emerging Market? The Institutional View

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DOI: https://doi.org/10.28924/2291-8639-23-2025-244
Published: Oct 16, 2025
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Rotcharin Kunsrison, Does Digital Business Reporting, XBRL, Regulate Financial Reporting Quality in Emerging Market? The Institutional View, Int. J. Anal. Appl., 23 (2025), 244.

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Rotcharin Kunsrison

Abstract

This study investigates how real earnings management (REM) and accruals-based earnings management (AEM) as proxies for financial reporting quality are affected by eXtensible business reporting language (XBRL). It seeks to integrate Institutional Theory within the theoretical framework, instead of Agency Theory, the principal theory of management opportunism. It is possible to think of XBRL as the external regulations that influence management's practice toward financial reporting. This study tests the set of suggested hypotheses using regression analysis on a special dataset from Thailand. The results demonstrate a considerable decrease in the practice of earnings management following the deployment of XBRL. Support is given to the notion of Institutional Theory, which holds that an individual's behavior is influenced by their surroundings. Furthermore, this study clarifies the continuing discussion about whether XBRL enhances the quality of financial reporting. Regulators should find this information useful. In particular, the findings complement prior literature in the way that XBRL is beneficial for financial reporting. It sheds lights on the ongoing debate whether XBRL is beneficial for improving the quality of financial reports.

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