Talk to me: XBRL makes business, financial reporting easier. (2003 Technology & Business Resource Guide: Digital Age).

Company management must quickly spot problems and opportunities, know what is going on and know what to do in time to make a difference. But because data is typically stored in different places throughout an organization, getting accurate and timely information is often difficult. Enter Extensible Business Reporting Language, or XBRL.

XBRL is a new Internet language developed by the accounting profession. It is a royalty free, open standard that provides a common platform for business reporting and improves the reliability and ease of communicating financial data.

But what is XBRL and what can it do for you and your clients?

LEVERAGING THE INTERNET

XBRL alters the way information is exchanged on the Internet. To get an idea of how different XBRL-enabled information is from current Internet information, ask yourself:

1. How do I use the information my audit clients provide? Can I automatically download it into my applications so it can be summarized and analyzed?

2. How do other stakeholders use the information my audit clients provide? Are they tinkering with it, cutting and pasting it into worksheets for analysis?

3. How does my staff gather and disseminate client information for analysis? Can my staff exchange and begin analyzing information regardless of the disparate applications they work with?

With so much information available to CPAs electronically, it is astounding that they spend so much time and energy obtaining, assembling and assessing the data they use to do their jobs. Now there's help.

XBRL facilitates the use of information by enabling various software packages to share information. This means data is delivered from one software application directly into another.

And XBRL will be readily usable thanks to an agreement in the software industry to almost universally adopt the technology standard that enables software to use XBRL. Most companies have embedded this technology into their software, so most clients and accounting firms will have XBRL capability in their systems once applications are loaded.

DEMAND FOR FINANCIAL INFO

Investors, regulators and creditors have something in common: They want companies to provide more information more frequently. These demands have taken on more urgency in the wake of recent high-profile corporate collapses.

Regulators are stepping up their requirements for increased disclosure and tighter reporting deadlines. With reporting requirements already onerous, companies can turn to XBRL to automate their reporting processes and reduce their time and expense.

Regulators and creditors also will be the source of more immediate demand for XBRL. Many prominent regulatory agencies and major banks are deploying XBRL internally to reduce the time and expense associated with consuming information that companies send them.

By requiring companies to submit information formatted in XBRL, companies gathering the information can automate the process of inputting information into their own software. Regulators can spend more time assessing company information, while creditors get more immediate, accurate and relevant information.

Other regulatory agencies also are taking steps to incorporate XBRL into their reporting processes. In the United States, the Federal Deposit Insurance Corp. is streamlining its Internet-based processes using XBRL. Likewise in the United Kingdom, Inland Revenue's Internet-based e-filing initiative requires the use of XBRL-formatted data for 2003 corporate returns. And the Tokyo Stock Exchange is making plans to use XBRL for all member-company reporting.

XBRL GATHERING STEAM

Regulators are not the only ones adopting XBRL. Many of the world's leading companies are providing their company reports in XBRL format. Morgan Stanley, Reuters and Microsoft, for example, are using XBRL as part of their external financial reporting processes. Says Morgan Stanley Executive Director Mark Schnitzer, "A globally accepted specification for business reporting will enable us to better serve the needs of investors worldwide."

Another group with a strong business case--and an exceptional return on investment--for XBRL is the lending community. Rather than collecting company credit applications and financial statements in paper format, these institutions can obtain the same information in XBRL. This allows creditors to reduce the time and costs associated with collection and analysis of information for lending and investment decisions from days or weeks to minutes.

Several creditors, including Bank of America, Dredsner Kleinwort Wasserstein and Deutsche Bank are using XBRL to reengineer their credit application and monitoring procedures.

"XBRL would obviously be a cost savings .o us," says David Vickers-Kock, senior vice ,resident in commercial risk management for Bank of America. "Data is valuable to us, but it's also costly for us to gather and use."

WHAT XBRL CAN DO FOR YOU

XBRL provides the accounting profession with a powerful tool to facilitate the advancement of corporate-reporting efficiency and effectiveness by allowing for:

* Lower preparation costs, more reporting flexibility and more timely information for management;

* Simplified information access, transparency of reported information and more timely information for investors, analysts, regulators and creditors; and

* More effective exchange of company information between software applications.

Benefits CPAs and their clients can realize from using XBRL include:

Lower operating costs. Due to the more efficient exchange of XBRL, CPAs can spend more time analyzing information and less time obtaining and assembling it.

Efficiency. XBRL reporting provides a more efficient reporting process, as data is published just once and can be used again and again to create any type of report.

Increased revenue opportunities. Firms and their clients can more efficiently analyze company results highlighting operational and effectiveness improvement opportunities.

Additionally, the use of the XBRL general ledger may help firms provide their non-assurance clients with reporting and management insights that are cost-effective for companies to afford and cost-effective for firms to deliver.

Enhanced service opportunities. There is a wide range of additional services that firms can extend to clients by leveraging XBRL tools. Among them: more efficient analysis of debt pricing and lending relationships; increased analysis and efficiency of client information; more efficient assessment of debt covenant compliance; and optimized reporting and risk models embedded within client applications. Also, XBRL's ability to automate many of these services is a key selling point.

These services are not dependent upon accountants becoming tech experts. XBRL capabilities are latent in many software applications, so they work in much the same way that many other technologies work.

XBRL is the accounting profession's part of the next-generation Internet and how we enhance the business-reporting environment.

RELATED ARTICLE: XBRL Consortium

The AICPA founded the XBRL Consortium in 1998 with 13 member companies. Today, that consortium--XBRL International--has more than 170 members, representing more than a dozen international jurisdictions. XBRL membership represents virtually all constituents of the corporate reporting chain, including auditors, management accountants, regulators, creditors, investors, software vendors and corporations. For more information, visit http://xbrl.org/aboutus/index.asp?sid=18.

Mike Willis, CPA is a partner at PricewaterhouseCoopers and is a member of the XBRL-US consortium.