XBRL: users and shareholders benefit.
Financial executives are under tremendous pressure to comply with rules and regulations from the Securities and Exchange Commission (SEC) and others to rebuild public trust. Internal fiduciary integrity is not enough, and peer-to-peer and industry analysis must be performed by both the corporate finance department and independently by the audit firm. Companies must identify competitors, locate source documents, copy and paste key data points and verify their accuracy, run variance analysis and then confirm or modify internal statements based on the results of this intensive review. That's where XBRL can help.
XBRL is an information format that has a firm footing outside the U.S. and is rapidly gaining ground domestically. It is a standard for preparing, transmitting and analyzing financial information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data. It enables deeper analysis because its format or "taxonomy" provides the most granular level possible. Ultimately, the speed and depth of data provided by mapping information to the XBRL standard provides the transparency demanded by stakeholders in the new regulatory environment.
XBRL is a globally agreed-upon structure that uses eXtensible Markup Language (XML) as its core. Because XML is a mature standard that has been widely adopted, software vendors are producing products today that facilitate the preparation of financial statements and consumption of financial information provided by peers and competitors.
Leading accounting and enterprise resource planning (ERP) vendors--including Oracle, Hitachi, SAP and Microsoft--provide support typically found in chart of accounts setup and maintenance, as well as financial reporting. Companies like Rivet Software, Semansys, Fujitsu and Decision-Soft are putting tools at users' fingertips to create financial statements using XBRL. Report-writer applications, such as Hyperion, Cognos, Caseware and FRx Software, are XBRL-enabled. Data providers, like EDGAR Online, are making data available in XBRL so executives can more easily meet Sarbanes-Oxley compliance requirements.
Indeed, the tools are available today to enable companies to leverage the power of XBRL to create, consume and disseminate data to all stakeholders. The SEC recently released its final rule for participating in the Voluntary XBRL Filing Program, underscoring how serious the notion of transforming corporate filings into an XBRL-based electronic reporting system has become.
--Contributed by Greg Adams, CFO and COO of EDGAR Online Inc. (firstname.lastname@example.org).
|Printer friendly Cite/link Email Feedback|
|Date:||May 1, 2005|
|Previous Article:||Sarbanes-Oxley 2005: reality and relief.|
|Next Article:||C corps vs. S corps: how tax law changes may prompt switching.|