Focus Us: Jun 21st,2021 中文版
 
Search
 
 Tools
 
xbrl > Tools >
XBRL Building Efficiency
2012-10-13 Editor: Views:

GREG ZEGAROWSKI OF LEAdING ENGINEERING AND ENVIRONMENTAL CONSULTANT, URS, DISCUSSES THE IMPACT OF XBRL ON NON-EXTERNAL REPORTING FUNCTIONS,THE VALUE OF INCORPORATING XBRL INTO INTERNAL REPORTING PROCESSES AND THE NEED TO EMBED BEST PRACTICE SOLUTION INTO SOFTWARE PRODUCTS. 

HOW HAS STRUCTURED DATA CHANGED THE ROLE OF THE CPA?

Accountants have always been inspired to bring order out of chaos and structured data fits nicely into that mission. structured data is not new if you think about relational databases. What is new with XBRL is the extent to which the data is becoming portable and meaningful across platforms and spoken languages.These beneficial outcomes of XBRL are the result of standardized agreement on the key features of business information. XBRL can be likened to a logical rather than physical data warehousing approach. 

The near-term challenge for CPAs is learning about the robust taxonomies that have already been created, such as those for us Generally Accepted Accounting Principles (GAAP) and International Financial Reporting standards(IFRs). over the next decade, the number of taxonomies – covering a diverse range of topics like sustainability reporting – will increase.This will create new opportunities for CPAs to help steer that development. CPAs will have to become more information technology savvy in order to ensure the accuracy of their XBRL documents. 

The amount of data that CPAs handle is growing exponentially, especially with the increase of social media and mobile communication. We simply have more data to deal with (sometimes too much).We now talk about ‘big data’. It will be incumbent upon CPAs and other information specialists to make sense of the vast volume of data to which we now have access. 

HOW MUCH OF AN IMPACT HAS XBRL HAD ON FUNCTIONS OTHER THAN EXTERNAL REPORTING?

By far, the biggest impact of XBRL to date has been on external reporting. However, as XBRL data repositories at the securities and exchange Commission (SEC) continue to grow, there will be a greater impact on internal reporting and data analysis. Analysts in government agencies, buy- side/sell-side firms, rating agencies and corporate strategic planning departments will have more timely access to key corporate performance data. 

For companies like URS, reporting in XBRL to the SEC already requires the input of multiple departments or functions, including external reporting, legal, investor relations and IT. Some companies are leveraging their XBRL structured data to enhance their investor relations web sites. Others are using their tagged data to find efficiencies in reporting to multiple agencies. 

A growth area for XBRL will be tagging data at deeper levels, such as at the consolidation or transactional level.The XBRL Global ledger taxonomy has been developed to facilitate reporting enhancements and representing data at these levels. 

IS ALL OF THE XBRL PROCESS CARRIED OUT IN HOUSE OR IS SOME OUT-SOURCED?

URS was one of the early adopters of an integrated approach for meeting its SEC XBRL reporting requirements.We selected IBM Cognos FSR,software that aids in the preparation of the traditional 10-Q and 10-K documents and the building of our extended taxonomy and tagging the financial statements. Other vendors offer competing products in this space.An increasing number of companies that outsourced the XBRl process previously are now considering or implementing in-house solutions.We anticipate that more companies will be considering integrated approaches in the future. 

Though our XBRL process is carried out entirely in- house, we have benefited from selected consulting services. For companies just starting their XBRL reporting journey, there can be distinct value in working with vendors who can assist with the initial set-up of the XBRL documents. 

HOW IMPORTANT IS EXTERNAL ASSURANCE FOR XBRL FILINGS TO YOU?

It is uncertain when the SEC may require audits of XBRL filings, but we have taken seriously the existing SEC rule that XBRL submissions are subject to normal disclosure controls and procedures.To that end,we have developed well-documented preparation and review procedures for our quarterly and annual submissions. In addition, we have found value in having our auditors from PricewaterhouseCoopers (PWC) perform quarterly agreed upon procedures (AUPs) on our XBRL documents. such engagements can help a company identify areas for improvement to their XBRL files, including the incorporation of recognized best practices. 

As the SEC’s XBRL mandate becomes fully implemented and as analysts and investors rely on tagged data more routinely, there will be more pressure to have the files subject to audit.This will present challenges to both preparers and auditors. one challenge already facing boards and audit committees is how to gain relative assurance over XBRL filings. We have found the exposure draft Proposed Principles and Criteria for XBRL-Formatted Information issued in 2011 by the AICPA Assurance services executive Committee helpful in designing our own disclosure controls and procedures.The exposure draft covers key aspects of preparing XBRL files, including completeness, mapping, accuracy and structure. 

WHAT VALUE DO YOU SEE IN INCORPORATING XBRL INTO YOUR INTERNAL PROCESSES?

Within our company there is a continual drive to find efficiencies in collecting and organizing information. With multiple business units, there is an ongoing effort to consolidate data from disparate systems. 

XBRL can be part of the overall solution. Up front work is required and, like any project, we will have to weigh the costs and benefits for possible future uses of XBRL.

One of the misconceptions about XBRL is that it only applies to financial data that may appear,or example, on a balance sheet. In fact, XBRL can be used to represent operational and transactional data, as well as certain non-financial data. It is a business reporting language, not just a financial reporting language.

One near-term application of XBRL for many companies could be leveraging the tagged quarterly and annual financial data to populate reports to other government agencies.There are numerous applications of XBRL that have yet to be envisioned. I think that once XBRL knowledge becomes more widespread, people and companies will be developing unique solutions to their data ‘pain points’. 

ARE THERE ANY TOOLS OR SOLUTIONS THAT YOU WOULD LIKE TO SEE OFFERED FOR XBRL?

Many SEC filers will be looking for more best- practice documents issued by the FASB, SEC, XBRL- US, AICPA and others. Historically, accountants have used publications such as the AICPA’s Accounting Trends and Techniques to bench mark disclosures. With XBRL, we are at such a nascent time in its development there is the oft-heard question,“How is everyone else doing this?” Extensive best practice documents and tools will help answer that question.

Ideally, access to best practice solutions would be embedded directly in the software products used by companies. In that way, companies could check their work at multiple points during the XBRL development process.

ANY FINAL THOUGHTS?

I would encourage preparers to get involved with their local XBRL jurisdictions, such as XBRL-US, and to become active in the standard setting process by, for example, providing comments to the FASB on taxonomy development. It is a golden opportunity to help design the future of financial (and business) reporting. 

 
 
About Us | Contact Us | Contribution | Twitter | Cooperation | Site Map | Legal Notices
Copyright © 2012 www.xbrl-cn.org All rights reserved. 沪ICP备05013522号