Preparers’ readiness for ESEF reporting: Early evidence from the Warsaw Stock Exchange

Abstract

Due to the recent introduction of the European Single Electronic Format (ESEF) in the European Union (EU), the study aims to explore the readiness of issuers of securities traded on EU-regulated markets to report their annual consolidated financial statements prepared under International Financial Reporting Standards (IFRS) using the Inline XBRL technology. The paper also offers preliminary insights into their selection of Inline XBRL implementation strategies. The study was conducted in the form of an online survey, with evidence being solicited from issuers of securities listed on the Warsaw Stock Exchange in Poland, whose financial reports were prepared in conformity with IFRS. In doing so, 35 representatives of public companies participated in our study, 25 of whom correctly completed the questionnaires. The results reveal that during the time frame of the study, the vast majority of surveyed organizations have already been in the process of adjusting their corporate procedures, practices, and infrastructures to the ESEF reporting requirements. In the context of theoretical preparedness, one of the significant findings to emerge from this study is that respondents acquired their expert knowledge in the field of ESEF mainly from webinars, conferences, training courses, and workshops. In turn, relating to practical readiness, the results indicate that respondents intended to use off-the-shelf tools or employ third-party service providers to produce Inline XBRL instance documents. Their decision to choose Inline XBRL implementation strategies, based on outsourcing and the bolt-on approach, aimed to comply with new regulations or to prevent modification of existing corporate reporting procedures and practices. Therefore, this study contributes to prior literature on XBRL and Inline XBRL standards adoption as well as implementation by focusing on the perspective of actors directly involved in the mandatory transition to the ESEF reporting regime.