Opinion

XBRL Leaders Push for Global Acceptance

With standards of corporate reporting under intensifying scrutiny, Extensible Business Reporting Language (XBRL) is the silver lining in the cloud hanging over the corporate world, leaders of the financial community were told at an investment industry forum.

A panel of experts from PricewaterhouseCoopers, Microsoft Corporation, Nasdaq, Morgan Stanley, Gartner, and Thomson Financial discussed how this new standard of corporate reporting will revolutionize the investment management industry.

“High-profile corporate failures have heavily underscored the need for consistency and clarity in the way companies report to investors and financial markets,” said Thomas Barrett, partner and global leader for XBRL-enabled Corporate Reporting Services at PwC. “The marketplace is demanding information that is timely, transparent and frequent, but providing aggregated information is costly, manual and error prone because of disparate systems, standards and reporting models. Now, a remedy is at hand. The future standard of corporate reporting will use XBRL, a universal Internet language that gives us the means to present transparent data, driving out the market rumor, suspicion and guesswork of the past.”

Barrett emphasized that XBRL “will only work fully if the collaborative efforts that have contributed to its development continue to flourish and the entire corporate world supports and adopts the standard. The benefits are too great and the need at this time too urgent to not join the push for XBRL.”

XBRL is being globally adopted by a consortium of more than 170 companies and regulatory bodies. It provides a consistent universal framework covering all forms of business reporting, most notably financial statements — both foreign and domestic — so that comparisons and analysis can be made consistently from statements within a certain company or among similar companies. Morgan Stanley, Reuters and Microsoft already are those companies already offering financial reports in XBRL and conditions for gradual implementation across capital markets is building around the world.

“The Internet has helped make a great deal of financial information available, but it is still a tedious process to try to get anything more than basic information on a company and to be able to easily compare data among companies,” added Barrett. “With XBRL, extensive information in a universal presentation would be available in seconds with the click of a mouse.”

He outlined benefits to all those along the financial supply chain, including those who report, consume and regulate financial information:
Consumers will find exponentially decreased cost and time in accessing financial reporting information through enhanced analytical capabilities and functionality, more timely and accurate data for decision-making, and automatic language translation.

Companies, or the producers of financial information, not only will be able to tell their story more clearly and precisely but also benefit from enhanced functionality and ease of use. In addition, management will gain enhanced analytical capabilities and internal controls by being able to access information and thus respond more quickly to problems and opportunities.

CFOs charged with meeting regulatory demands can provide speedy and fully compliant responses, both in the United States and around the globe. XBRL, for example, can be the standard that will help listed European companies comply with the International Financial Reporting Standards required by 2005 for their group financial statements.

Regulators also will face far fewer delays in reviewing documents and almost none of the errors that have surfaced in the past when financial information is transferred from corporate papers to regulatory forms.

The PricewaterhouseCoopers forum, entitled “Straight Through Reporting: Streamlining the Information Supply Chain,” is part of its series on Web services and XBRL. It is available to the public at http://www.nasdaq.com/xbrl.

Related Articles

Back to top button
Stay up to date
Don't miss out on the latest industry news and articles
Stay up to date
Don't miss out on the latest industry news and articles
You are Subscribed!
Your subscriptions means a lot to us.
Don't miss out on the latest Industry news
You are Subscribed!