Transformation of accounting through digital standardisation

Abstract

Purpose Corporate reporting infrastructure and communication are being transformed by the emergence of digital technologies. A key element of the digital accounting infrastructure underpinning international corporate reporting is the IFRS Taxonomy, a digital representation of international accounting standards that is required by firms to produce digital corporate reports. The purpose of this paper is to trace the development, governance and adoption of the IFRS Taxonomy to highlight the implications for accounting practice and standard-setting. Design/methodology/approach The authors mobilise Actor Network Theory and a model of transnational standardisation to analyse the process surrounding the formation and diffusion of the IFRS Taxonomy as a legitimate “reference” of the IFRS Standards. The authors trace the process using interview, observation and documentary evidence. Findings The analysis shows that while the taxonomy enables IFRS-based reporting in the digital age, tensions and detours result in the need for a realignment of the perspectives of both accounting standard-setters and taxonomy developers that have transformative implications for accounting practice and standard-setting. Originality/value The study explains how and why existing accounting standards are transformed by technology inscriptions with reflexive effects on the formation and diffusion of accounting standards. In doing so, the paper highlights the implications that arise as accounting practice adapts to the digitalisation of corporate reporting.