Intention to adopt standard business reporting in Australia: an application of the technology-organization-environment framework

Azam, M 2012, Intention to adopt standard business reporting in Australia: an application of the technology-organization-environment framework, Doctor of Philosophy (PhD), Accounting, RMIT University.

Document type: Thesis
Collection: Theses

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Title Intention to adopt standard business reporting in Australia: an application of the technology-organization-environment framework
Author(s) Azam, M
Year 2012
Abstract The SBR project in Australia represents a technology innovation offered to businesses that has been led by government (i.e., the Australian Treasury with the co-operation of major business regulators, the ASIC, ASX, ATO, ABS and State government Revenue Offices), with the preceding support of IT consultants, software developers and accounting/auditing firms. The Australian Treasury’s SBR project has substantially drawn on the XBRL taxonomy project designed and implemented by the government in the Netherlands. XBRL, a variant of Extensible Mark up Language (XML), defines the financial data on the web with explicit semantics in a machine readable format. This study seeks to understand the prospect of SBR adoption and the underlying factors that could be the determinants of intention to adopt in Australia. In addressing these objectives, the study reports findings from both the evaluation of normative claims made in the professional and academic literature about the virtues of using XBRL, and quantitative analysis of data collected from a survey designed to model the determinants of the extent of intention of companies, as perceived by their Chief Financial Officer, to voluntarily adopt SBR.

The conclusion from normative assessment (after a review of both scholarly literature and practitioner comments) on XBRL/SBR is that both users (mainly investors/securities analysts) and regulatory bodies have most to gain out of the SBR implementation. It is expected that compliance reporting costs of the preparers would be reduced in the long run but there will be short-term costs associated with installing the SBR platform, with potential disruption to information processing and reporting systems, and with management and operating staff training. In the longer-term, preparers are likely to face pressure to meet users’ expectation for continuous, real-time, financial reporting that the SBR facility would have the capability to fulfil. This longer-term prospect for continuous, audited financial information that can be reported in flexible ways has the potential to reveal corporate proprietary information that competitors can use for competitive advantage against the reporting entity.

The empirical part of this study, based on data from a survey of listed companies, finds that there is a low degree of intention to adopt SBR. This finding suggests that the voluntary take-up by listed companies of the Australian government’s SBR initiative will not succeed, as was the similar experience in the UK and the US. The study, therefore, concludes that, unlike most other innovations in information technology, technological arguments favouring SBR (or XBRL) as a reporting medium are not expected to induce adoption of SBR by listed companies in Australia; rather entities are most likely to respond to industry wide initiatives and communication about SBR before making a decision to adopt SBR. The study goes on to provide implications for practice in the light of this finding. The results of this study in the Australian SBR setting are also likely to be of interest to regulatory bodies in other countries that have had disappointing XBRL adoption rates.

The study contributes to the gap (i.e. investigation of factors leading to XBRL adoption) of growing research on XBRL which tended to concentrate mainly on technological arguments. This study provides an analysis of survey data on intention to adopt SBR that is more generalizable. However the finding of this study is subject to limitations that are noted in the thesis.
Degree Doctor of Philosophy (PhD)
Institution RMIT University
School, Department or Centre Accounting
Keyword(s) Standard Business Reporting (SBR)
Extensible Business Reporting Language (XBRL)
Extensible Mark up Language (XML)
Technology- Organization-Environment (TOE) Framework
Intention to adopt
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Created: Wed, 17 Jun 2015, 10:51:38 EST by Denise Paciocco
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