XBRL: Solving real-world problems

The use of eXtensible Business Reporting Language (XBRL) continues to grow since its public introduction in April 2000. For example, since April 2005, the Securities and Exchange Commission (SEC) has been encouraging Electronic Data Gathering, Analysis, and Retrieval (EDGAR) filers to voluntarily furnish XBRL-related documents as attachments to traditional EDGAR filings. More recently, the SEC has funded a US$54 million project to modernise EDGAR. XBRL is a key component of this modernisation and the mandatory filing of XBRL documents was phased in starting in 2009. In October 2005, the Federal Financial Institution Examination Council (FFIEC) completed a $39 million project that requires over 8000 banks to submit their quarterly call reports to the FFIEC using XBRL. Around the world, several stock exchanges, taxing authorities and other regulatory agencies are requiring organisations that report to them to use XBRL. Beyond the required reporting, XBRL is also providing an improved platform for such things as internal reports and consolidations. Despite the potential benefits of XBRL only 137 companies (out of over 10 000 filers) participated in the SEC's voluntary filing programme (VFP). Less than 1 per cent of the banks required to use XBRL for quarterly call reports to the FFIEC are also participating in the SEC's VFP. XBRL adoption appears to be sitting on the edge of the chasm between the early adopters, who are tolerant of the issues associated with new technology and are less concerned about near-term Return On Investment (ROI), and the majority of the potential market, who are more sensitive to costs, ROI and ease of use. To help XBRL move over that chasm, our study begins by conducting four focus groups to develop an understanding of the current issues and concerns faced by organisations related to accounting, financial reporting and auditing. The specific issues and questions regarding XBRL were subsequently summarised and forwarded to selected members of the XBRL community, who were asked to suggest how XBRL addressed those issues, concerns and questions. The findings are that the XBRL community feels that XBRL technology can fulfill the needs of the financial reporting community and that further awareness within that community is needed before there will be widespread adoption of XBRL absent a regulatory requirement. These findings are important essentially to anyone wishing to promote or champion the adoption of XBRL for management and control of internal financial data and reporting processes. This list should include, but certainly not be limited to: compliance officers; accounting and systems auditors, both internal and external; finance and information systems managers; and, systems designers. Although our study reports ways in which XBRL addresses many of the questions, issues and concerns of auditors, researchers may wish to conduct further studies to determine if there are other questions, issues and concerns of auditors that were not found in our study. Or, our findings could be used for comparison of this topic in other populations such as compliance officers and finance managers. Researchers could also study ways to effectively convey our findings to promote and champion the diffusion of XBRL.