THE EFFECT OF extensible BUSINESS REPORTING LANGUAGE (XBRL) ADOPTION ON EARNINGS MANAGEMENT: EMPIRICAL EVIDENCE FROM AN EMERGING COUNTRY

Purpose: This paper aims to study the impact of adoption extensible Business Reporting Language (XBRL) on earnings management. Design/methodology/approach: This study uses a sample of all firms listed on the Indonesian stock exchange, except for finance and real-estate sectors from 2012 to 2019, with a total of 2,560 firms-years with panel data analysis. Findings: Four findings in this study are listed as follow. First, the surpris¬ing result is that accrual earnings management increase after the adoption of XBRL. Second, after the adoption of XBRL, there was an increase in real earn¬ings management. Third, the results of the study prove that the use of Big 4 audi¬tors will weaken the increase in real earnings management after the adoption of XBRL. Finally, this study shows that after the adoption of XBRL, it turns out that both accrual and real earnings management experienced an increase. Originality/value: This study contributes to providing an evaluation note to IDX regulators that the goals they want to achieve have not been achieved. This study provides empirical evidence for the debate over whether the adoption of XBRL is beneficial.