Will the AICPA Take Over XBRL Standards?

Some give the SEC's Cox credit for injecting a sense of reality into a field where airy notions long prevailed. "Cox raised the bar" for XBRL-US, specifically, says Dennis Santiago, chief executive officer of Institutional Risk Analytics. The chairman's initiative brought XBRL-US "out of R&D mode and into a production mode," providing a necessity for checks and balances within the organization as it produces "a real tool that people can rely on, instead of an idea," Santiago adds.

Along with the elevated standards, however, have come questions about how the organization will be run — and, especially, who will run it. Some non-accounting members of the consortium are worried that AICPA — and accountants generally — will dominate the process of hatching the overarching XBRL taxonomies.

In a recent E-mail to Roberts that questioned the openness and balance of the organization's governance structure, for example, Christopher Whalen, a managing director of Institutional Risk Analytics, asked: "How is the transition to an 'arms length' relationship with AICPA happening? How is the broadening of the governance base to take in the non-accounting mission elements of the new organization being managed?"

Some XBRL-US members contend that the group's leadership should include more corporate CFOs and investor-relations specialists, as well as more bankers, brokers, software makers, and data aggregators and analyzers. Since he joined his company about a year ago, Sunir Kapoor, president and chief executive officer of UBmatrix, an XBRL taxonomy designer and member of XBRL-US, observed that while he's seen strong representation from Microsoft and Adobe in recent months, "the focus, priorities, and discourse that take place [within the group] come primarily from the accounting profession."

Kapoor, who hopes his company is in the running to be one of the vendors in the taxonomy project, thinks that the leadership of the group should take the opportunity of the changed governance structure to provide more non-accounting representatives on the steering committee and board. (Kapoor, however, can't complain that his own company doesn't have a say in the organization: Phil Walenga, UBmatrix's director of financial services, is a member of the XBRL-US steering committee.)

Some critics also say that a narrow focus on accounting issues could hinder the interaction of the taxonomies with non-accounting data, non-XBRL technology, and the SEC's database. "The accountants are only focused on the accounting side of this," says a top executive for a technology company enrolled in XBRL-US, who noted that data tags must be made "extensible" to the changes companies may ring on the basic standards. "I know the AICPA is going to be focused on the taxonomy, but there's a potential for a gap between the taxonomy and the reusability of the data," said the executive, who spoke on condition of anonymity.

For their part, the members of the steering committee want to have the AICPA continue to play a strong role in XBRL-US. Asked to confirm rumors that Barry Melancon, the accounting institute's president and CEO and Arlene Thomas, a vice president there, would be named to board or executive positions of the non-profit, Liv Watson, vice chair of the steering committee and the vice president for global strategies at EDGAR Online, said that those were "good rumors." She added that she "wouldn't be surprised" if the XBRL-US steering committee considered an arrangement similar to the one that AICPA has with XBRL-International in which the CPA institute has a five-year position on the international group's steering committee.

Overworked in recent weeks from hashing out the terms of the organization's deal with the SEC, steering committee members told CFO.com in a group interview that they are turning their attention to forming a democratic governance structure for XBRL-US. They hope to have an interim board in place over next few weeks, a step required under Delaware law in order to sign the contract, according to Watson. At some point, the steering committee will name a nominating committee to name the candidates for a permanent board that the group hopes to have in place by early next year. Picking the board will be an "open," "member-driven" process, committee members say.

Indeed, the steering committee "has always been broader based than just the accounting profession, and the purview of the new organization will be no different," contends Amy Pawlicki, director of business reporting, assurance and advisory services at the AICPA. "It will incorporate as many different participants in the reporting supply chain as possible." She noted that in addition to representatives of the accounting industry, the board also included members from data aggregators (EDGAR Online) and wire services (PR Newswire director of investor relations Michelle Savage).

Referring to AICPA, however, Pawlicki added, "no one said we were going to be less active in terms of our contribution to and support of XBRL-US."

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