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The Relevance of XBRL Voluntary Disclosure for Stock Market Valuation: The Role of Corporate Governance
Author(s) -
Cormier Denis,
Dufour Dominique,
Luu Philippe,
Teller Pierre,
Teller Robert
Publication year - 2019
Publication title -
canadian journal of administrative sciences / revue canadienne des sciences de l'administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 48
eISSN - 1936-4490
pISSN - 0825-0383
DOI - 10.1002/cjas.1483
Subject(s) - xbrl , corporate governance , accounting , business , valuation (finance) , earnings , relevance (law) , accounting information system , stock market , business reporting , stock (firearms) , finance , mechanical engineering , paleontology , engineering , horse , political science , law , biology
The aim of this paper is to investigate the relevance for stock market pricing of accounting earnings of voluntary disclosures in XBRL files considering the quality of corporate governance. Results are the following. It appears that XBRL extensions attract financial analysts. Good governance is positively associated with voluntary XBRL extensions. We observe that XBRL extensions enhance the positive relationship between accounting earnings and stock price. However, this positive association is reduced for firms with good governance, suggesting a substitution effect between XBRL extensions and corporate governance. Finally, it appears that XBRL extensions would strategically be related to earnings quality. This research highlights the importance to consider governance when assessing the value relevance of XBRL disclosures for stock market pricing.