Logistic Analysis: main factors in adopting XBRL voluntarily

1142 foreign shareholders‘ equity FSH. And 3 factors firm size, SIZE; decreased debt ratio, CLEV ; Tobin‘s Q, TQ among control variables act as the common factors which encourage firms to join the voluntary program of XBRL filing. Insert Table 5 about here Earnings surprise can be used as a means of private information events, and users with private information encourage a voluntary disclosure to acquire benefits from their private information Brown et al., 2008. And firms with increased earnings performance carry out more disclosure activities including their earnings announcements Miller, 2002. But not matched with these prior studies, the smaller portion of the earnings growth or negative earnings surprises and the more voluntary filing to XBRL system FP, -0.520 . Firms increase their disclosure activities to reduce the cost of capital for external financing due to information asymmetry Carslaw, 1988; Bowen et al., 2008, and these stories are matched with the result of logistic analysis to XBRL voluntary filers FIN, 0.177 . In general, main auditors like as Big 4 have more incentives to compel disclosure standards more strictly and extensively for their reputation Wang et al., 2008. These allow them to monitor and lead firms to increased voluntary disclosure, matched with our result from a viewpoint of auditing incentives BIG4, 0.445 . It looks a matter of course for firms with a reason of audit delay or reporting lag to hesitate about taking part in the voluntary filing program of XBRL OARL, -0.016 . Moreover, Block holders want to reduce their monitoring cost Sengupta, 2004, and large-sized firms or firms with a big audit firm have an incentive or capacity to report their financial 1143 information more promptly Ahmed, 2003. Negative correlations of audit delay with relative measures MSH, BIG4, SIZE in Table 4 back up what characteristics of firms with a delayed-reporting pattern might be and through what path they reach the less- voluntary-filing-decision of XBRL. Not like various prior studies, governance- structure measures don‘t affect whether or not to join in the voluntary program of XBRL filing except foreign shareholders equity FSH. Firms with the strengthened monitoring activities of independent corporate boards are likely to perform suitable disclosure-related activities, ensuring that firms try to communicate with investors and give good signals of transparency Cai et al., 2006; Ajinkya et al., 2005; Gul and Leung, 2004; Forker, 1992; Eng and Mak, 2003; Fama, 198 0. Outside investors force the higher level of firms‘ disclosure to reduce information asymmetry Jensen and Meckling, 1976. The higher portions of foreign shareholders encourage firms to adopt a new reporting system, and this is statistically significant FSH, 1.102 . In our cases, only two governance proxies foreign shareholders, FSH; main shareholders‘ equity, εSH 186 support the results of prior studies. Lastly, the statistics of change of debt ratio CLEV say that the more increased debt ratio and the lower possibilities of XBRL voluntary filing of firms. These results show different aspects from prior studies, which mention that highly leveraged firms disclose more financial information to reduce their creditors‘ monitoring costs and convince of their debt solvencies Premuroso and Bhattacharya, 2008; Jensen and Meckling, 1976. 186 Block shareholders have no effect on corporate disclosure activities or the information quality of firms, especially in Korea Cheon, 2003; Ahn and Lee, 2005. 1144 To sum up all the results of the logistic analysis, firm performance FP, new external financing FIN, foreign shareholders equity FSH and main audit firms in Korea BIG4 lead a firm to take up the XBRL system voluntarily. But if firms usually show not a prompt disclosure pattern OARL, then they are further away from the participation of XBRL voluntary program.

5.5. Regression Analysis: earnings quality of voluntary XBRL filers

There have been several researches that show that early adopters of a new accounting regulation or voluntary disclosers of information show good quality of earnings, or that good earnings quality will induce firms to make voluntary disclosures Gassan and Sellhon, 2006; Francis et al., 2008. Following these results, our second research interest in this paper is whether voluntary XBRL filers really show a high quality of earnings; the results of the regression analysis to check this are shown in Table 6. The explanatory powers of the regression analyses of the dependent variables ADA, APDA and ACDA are about form 7 and 8. The all F-statistics show significant values at the 1 level, meaning each variable in the regression model is an explanatory factor for three dependent variables. Francis el al. 2008 says that firms with good earnings quality carry out more broad activities of disclosure, voluntarily. The dummy variables for our primary focus, XBRL, exhibit negative coefficients for each -0.006 to -0.013, and their coefficients are significant at the 1 or 5 significance level - that is, the earnings quality of voluntary XBRL filers is better than that of their control group. Insert Table 6 about here 1145 In the case of foreign shareholders equity FSH and lagged total accrual TA, these items have the negative relations to absolute discretionary accruals ADA, APDA and ACDA as various prior studies. According to the efficient monitoring theory, more sophisticated investors with analytical skills and information capabilities have strong monitoring power so that they suppress a firm‘s incentive to manage earnings Pound, 1988. Different with prior studies, major shareholders MSH fulfill their monitoring role very strongly. Dechow 1994 said that there is a negative relation between accrual and cash flow caused by different timing of actual cash flow from accounting numbers. But our results of cash flow OCFS are not consistent across three regression models. Especially the direction with Modified-Jones DA ADA supports the story of above, but other two models are not likely that. On the whole, other control variables show the consistent patterns in their directions and significances. . CONCLUSION We investigated what factors affect firms‘ choices to join in the voluntary program of XBRδ filing in Korea, and whether XBRδ voluntary filers‘ earnings quality are better than for their control group. We selected firm-specific variables for our empirical model, with regard both to three kinds of firms‘ incentives to participate in the voluntary program, and to the control matters of firms‘ characteristics. Considering the proper function of the XBRL system within the information process, we also checked the earnings quality of voluntary XBRL filers in Korea.