This study underscores XBRL’s role in financial reporting as the significant signal of transparency and quality to investors, supporting both the information asymmetry and signaling theories. The empirical evidence reveals that XBRL adoption positively affects the financial reporting quality and, consequently, investor confidence, highlighting XBRL’s signaling value. By demonstrating XBRL’s capacity to communicate a company’s commitment to transparent reporting, this research provides the insights for corporations, investors, and regulators on the benefits of XBRL for improving financial standards and enhancing investor trust. The findings advocate for the strategic use of XBRL in signaling financial integrity, encouraging regulatory support for its adoption to bolster financial transparency and market confidence. This contribution enriches the dialog on XBRL within financial reporting and investor relations, emphasizing its theoretical and practical implications for informed investment decisions and disclosure practices.