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Can XBRL Lessen Accounting Scandals? Aug. 26, 2002 XBRL, the eXtensible Business Reporting Language, an electronic method for companies to report financial information in accordance with GAAP, may be the answer to the accounting scandal crisis, according to a recent article in Strategic Finance Magazine. While XBRL cannot remedy fraudulent accounting, author Neal Hannon argues it will make data crunching faster and easier for organizations such as the Securities and Exchange Commission, so corporate filings stand a greater chance of a thorough review. States Hannon: "With XBRL, all 14,000 corporate submissions could be read by analytical software, creating an increased probability that anomalies in financial reporting could be discovered much earlier. Industry data analysis could be performed on 100% of the filings ... Submission of SEC requirements in XBRL could go directly into a computer program for screening and further processing." Recent milestones in XBRL include a pilot program launched by Nasdaq, Microsoft and PricewaterhouseCoopers that provides investors with remote access to XBRL financial data from five years of financial reports for 21 Nasdaq-listed companies. Strategic Finance Magazine is produced by the Institute of Management Accountants. |
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