XBRL Opportunity
XBRL (extensible business reporting language) has been heralded as a technology which will be leading us to a verge of a new era in financial reporting with interactive data that will make the financial reporting processes simple and efficient. While some of the corporate treasurers are slowly getting acquainted with the technology, many finance managers and internal auditors, who will be most affected by it in the coming years, do not seem to be aware of this ground-breaking and innovative technology. The organizations could pursue xBRL not only for compliance but also to help address the issues of current market environment.
Per the SEC rules which are to be adopted by first quarter 2009, all public companies with market capitalization greater than $5 billion would need to start applying XBRL tags to their 10-Ks and 10-Qs for periods ending on or after December 15th 2008. While these dates discussed above represent the need for organizations to move the XBRL way rather quickly, a recent Institute of Internal Auditors (IIA) survey of more than 200 chief audit executives worldwide found that more than half are not yet familiar with XBRL, and an over 90 percent would need guidance on the new process of filing financial statements with interactive data. This just shows that the majority of internal auditors have not yet been engaged in the process of converting financial reporting into an interactive data format.
While it is already being put to practical use in a number of countries in North America, Europe and others and implementations of XBRL are growing rapidly around the world, there still seems to be an opportunity for others to start the process and benefit from the same.
Infosys took active part in SEC Voluntary Filing Program and is one of active contributors to the XBRL effort. We have moved very quickly on adopting this standard and have learnt a lot of interesting lessons in the process. In a recent article in Financial week, we have highlighted and shared our lessons learned and our successes with the XBRL technology.
I feel that with the status of SEC proposal being in pending state now, Corporate Treasurers and Internal Auditors will have time to catch up which could be beneficial to the organizations in the end. But the main point to note for the new adopters is to start NOW and get some test filings done and get prepared for the mandate which could happen very soon.
