Are You Ready for XBRL?
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Source: Journal of Accountancy XBRL (extensible business reporting language) is “a new global open standard for formatting financial information, [that] makes reporting and analysis faster, cheaper and significantly easier to automate. It also improves access to information that often has been difficult to locate in financial datasets. In addition, XBRL reduces inconsistencies—such as ambiguous business terminology and myriad data formats—that often necessitate manual intervention and slow financial reporting.” According to Charles Hoffman, CPA, the father of XBRL, all CPAs should “develop a basic competency in XBRL, which soon will be embedded in literally every aspect of internal and external business reporting.” Says Hoffman, “My vision is one of financial reporting and auditing that is friction-free in the sense that it involves minimal unnecessary manual intervention. By that I mean turning unstructured clusters of text into structured data that computers can process to facilitate their re-use. In such an environment, intelligent software tools driven by XBRL metadata would integrate the various work flow components that contribute to financial reporting, reduce re-keying of data, automate disclosure checklists and automatically validate the complex information contained in financial statements and the supporting audit schedules.” Collecting financial data from various company systems is inefficient. It must be moved into audit schedules, connected to lead schedules, and linked to financial statements. CPAs are often late in using new technologies. But new software programs are available, and CPAs can experiment with them. Inspect some of this software at www.xbrl.org/productsandservices. Educational materials are not abundant, but there are some resources that can be found at www.xbrl.org/educationandtraining and at the CPAs can join XBRL International. Go to www.xbrl.org/howtojoin. From Journal of Accountancy, September 2005. For the complete article, click on the following link: http://www.aicpa.org/pubs/jofa/aug2005/tie.htm. |