T-test and correlation Analysis

1139 firm shows a negative score of earnings or a drop of earnings, then this leads directly into the fall of their actual value so that this firm has an incentive to overlook earnings‘ management DeAnge lo, 1λ76. Anyway, the more chances of earnings‘ management mean the higher possibilities of information asymmetry between the management and outside information users Carslaw, 1988, and the more cost of capital Bowen et al., 2008. Accordingly, the hig her tendency of earnings‘ growth of XBRδ voluntary filers can be linked with the less cost of capital due to the reduce information asymmetry, so that XBRL voluntary filers is likely to do more external financing than non-filers FIN, t=2.740 . But, none the less, their dependence on total liabilities shows a declining pattern different with matched firms CLEV, t=-0.110 . There are an indirect evidence for the rapidity and efficiency of the formation and verification of financial information. On average, XBRL voluntary filers put about γ7 days in preparing their auditor‘s report, and have about β.4 days-difference significantly with their matched firms OARL, t=-1.910 . But, even though their verifying process of financial information is less delayed, it may be meaningless if information users can‘t use the information with confidence of good quality of it. This matter can be ascertained by 3 proxies of earnings quality – ADA, APDA, ACDA. Like as prior studies Francis et al., 2008; Yhim et al., 2003; Lapointe-Antunes et al., 2006, XBRL voluntary filers also show the lower levels of DAs that is, the higher levels of earnings quality in a general meaning consistently in 3 proxies than their matched group, and all of these are statistically significant. So we can see the more rapid preparation of audit report and the higher quality of earnings of XBRL voluntary filers. We can guess that these results are related to the size of firms and their auditors. XBRL voluntary filers usually prefer to BIG4 auditors and show a tendency to a larger firm 1140 size and a higher portion of foreign investors Premuroso and Bhattacharya, 2008; Ahn et al., 2007; Ahn and Lee, 2005. In general, foreign or institutional investors are more sophisticated, but have less possibility to access to the information of domestic firms easily and sufficiently. To reduce their monitoring costs, they can put pressure on firms to disclosure more actively Jensen and Meckling, 1976; Lee and Sohn, 2005. Insert Table 3 about here Table 4 shows the Pearson correlation coefficients among variables for multivariate analyses – logistic and regression analyses. In panel A for variables included in our logistic regression model, 6 variables FP, FIN, FSH, BIG4, OARL, SIZE, TQ show the same pattern with the results of t-test to the dependent variable, XBRL. XBRL filers have the higher preference to make a contract with the big auditors for their financial information, and the directions of FP and FIN of XBRL voluntary filers seem to have an opposite pattern. And also this pattern is connected with a negative correlation between FP and FIN. This reverse correlation of FP and FIN can be proved circumstantially by the relationship of them with cash flow OCFS or liquidity CUR. So we guess that more external financing activities as well as less continuous earnings growth are the distinctive features of XBRL voluntary filers. We also present the result of correlation analysis for our second model of regression in panel B. First of all, our three proxies for earnings quality ADA, APDA, ACDA have significant relationship with each other. Though APDA is a kind of abnormal-DA concept which extracts industry- mean DA from each firm‘s DA, these positive and strong relationships mean that our three proxies have the same characters. 1141 Various prior studies refer to the positive relationship between earnings quality and voluntary disclosure Francis et al, 2008; Yhim et al., 2003; Lapointe-Antunes et al., 2006. Like the preceding results of t-test, three DAs have a reverse correlation with XBRL voluntary filers dummy, that is, the more voluntary filers of XBRL and the higher earnings quality. And also, loss firms have the stronger incentive to manage earnings to avoid reporting their losses or earnings decreases Burgsthahler and Dichev, 1997. Insert Table 4 about here

5.4. Logistic Analysis: main factors in adopting XBRL voluntarily

To establish the main factors in the voluntary adoption of XBRL the possible variables, we undertook a logistic analysis from three different angles financial incentives, governance structure incentives and auditing incentives. The possible variables were included in our logistic regression model according to the results of prior studies, but we carried out a sensitivity analysis on the variables from firm performance = continuous earnings growth, FPto audit delay OARL in order to check their validity and endogeneity. The results of the logistic analysis tell us that five items – from two financial incentives firm performance, FP; new external financing, FIN, one governance incentive foreign shareholders‘ equity, FSH, and two auditing incentives main audit firms in Korea, BIG4; and audit delay, OARL – have significant influences on the choice of voluntary XBRL filers. But there are not any factors to affect the firms‘ decisions of XBRL adoption in the view of governance structure incentives except 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