Accounting and information systems associate professor Steve Sheetz has received a grant from accounting and consulting firm PricewaterhouseCoopers to investigate why more firms have not adopted XBRL -- eXtensible Business Reporting Language, part of a group of information systems languages used for communicating information between businesses and on the Internet.

XBRL has many benefits, Sheetz said. “It has been touted by the Securities and Exchange Commission and the Financial Accounting Standards Board as well as accounting and consulting firms as a means to significantly improve the process of financial reporting, auditing, and securities analysis while reducing their costs.” These improvements and cost reductions, he said, come in the form of time savings from re-keying data, the ability to analyze data more efficiently and thoroughly, and greater accuracy of the downloaded data.

“Adopting standards for electronic communication of accounting information is a critical issue for accounting firms and the companies they serve,” he said, yet, “currently, only 74 companies have chosen to file XBRL-formatted reports with the SEC.”

With the $48,000 grant from PricewaterhouseCoopers, Sheetz and two faculty colleagues from the College of Charleston, are investigating the factors behind a firm’s decision to adopt XBRL. Identifying these factors, he said, will help explain why adoption has been limited and suggest possible actions that regulators, audit firms, and investors can take to encourage adoption.

The researchers will develop and test a research model including external pressure, organizational, and innovation-related factors and collect data through an online survey of potential XBRL adopters. “We expect that our research will benefit accounting and information systems practitioners and academics, including those who teach courses with XBRL assignments and activities,” Sheetz said. The project’s theoretical insights may also be relevant to other domains, he added. “For example, the adoption of comprehensive standards for electronic health records remains elusive despite more than a decade of work.”

Read more about Sheetz’s research in the fall 2008 issue of Pamplin magazine.