We propose new measures of financial disclosure quality based on XBRL standard and extension tag counts. XBRL is designed to allow users to analyze more financial statement detail, thereby increasing reporting transparency. Thus, firms that use more XBRL standard tags should produce more detailed and comparable financial reports. To test this assertion, we examine the association between XBRL tag counts and stock return synchronicity, which measures the market’s reaction to the quality of firms’ disclosures. We find that firms that use more standard taxonomy tags in their 10-K reports have higher stock return synchronicity after the 10-K filing. However, we find that stock return synchronicity decreases as XBRL extension tag counts increase, suggesting that the use of extension tags reduces disclosure quality. Our findings contribute to the growing body of research on XBRL disclosure.
Data Availability: Data are available from the public sources cited in the text.