The importance of transparency in financial reporting and the efficiency of XBRL reporting on transparency: USA case and Turkey comparison

The numbers of listed corporations and their turnovers in capital markets have increased due to integrated economic relationships between countries by globalisation. Financial scandals in recent years have resulted in losses for investors which in turn has damaged the trust environment in financial statements despite the growth in the capital market. It seems that the only way is to recover the trust environment is by making the financial statements more transparent. The increase in complexity and the amount of financial data is preventing having a transparent environment. In order to eliminate the difficulties companies started to use information technologies and XBRL, which is one of the most developed web-based central reporting languages in the financial reporting process. XBRL is a reporting tool which has been created with important expectations to reduce the financial manipulation risk and to ensure a financially transparent environment in financial reporting. The aim of this study is to investigate the importance of financial transparency to regain the trust environment on financial statements, to emphasize the importance of the information technologies to regain the trust environment in the capital market and to determine the effects of XBRL on financial statement transparency. Research done in the USA was used to investigate the effects of XBRL in providing a financially transparent environment and other research done in Turkey was used to explore the possibility of its use in Turkey.Key Words: Capital Market, Economic Growth, Financial Transparency, XBRL.