The study finds that reducing the costs of processing corporate disclosures through XBRL adoption can strengthen the SEC’s ability to monitor firms’ regulatory filings.

Key Takeaways

• Following mandatory XBRL adoption, both the frequency and quality of SEC comment letters related to 10-K filings increased.
• The findings suggest XBRL improves SEC monitoring through automated data extraction, standardized reporting, and greater scrutiny of complex reporting issues.
• The study provides evidence that lowering disclosure processing costs can improve regulators’ ability to monitor corporate reporting.

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