Abstract
Using Taiwan listed and OTC companies as the sample, this paper studies how the requirement to adopt eXtensible Business Reporting Language (XBRL) affects corporate earnings management. Our findings show that mandatory XBRL adoption reduces earnings management. Regarding the effect of corporate governance, the negative association between mandatory XBRL adoption and earnings management becomes weaker if the major stockholders’ shareholding is higher, and becomes stronger if the institutional investor shareholding is higher. The results support the Taiwan government’s policy of requiring companies to use XBRL to report financial information. Key words: XBRL, earnings management, corporate governance
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