TECHNOLOGY
SEC chairman Christopher Cox, head cheerleader for XBRL, is apparently not rah-rahing enough about the Internet programming language that could make financial statements more interactive and comparable.
More than three-fourths of public-company CFOs have no plans to use XBRL, according to a joint survey of 653 finance executives by Computer Sciences Corp. and Financial Executives International's research arm. Many of them don't even know what it is; at least 30 percent of the survey's respondents said they are unfamiliar with the program, which so far is voluntary.
Still, as XBRL proponents would argue, at least 35 companies — including such heavyweights as Microsoft and PepsiCo — have joined Cox's cheerleading squad. The technology has the potential to transform the EDGAR filing system and give investors quick, easier access to companies' financial data, they say. (Although, won't that happen only if all corporations agree to use it?)
CSC has concluded the SEC is not having much of an influence on encouraging more companies to begin using XBRL. That could force Cox's hand in requiring companies to use it, said CSC senior partner Gerald Boltin during the FEI Summit on Tuesday before giving a Donald Rumsfeld-style explanation for why finance execs are holding back: "A CFO has so much on his plate that he has to do. Why should he add something he doesn't have to do to the things he has to do until it's required?"
Posted by Sarah Johnson | May 22, 2007 08:21am | Comments (6)
XBRL, like other supply chain standardization efforts, lowers the cost of reporting, access, validation, analysis, etc. all real issues for CFOs and their stakeholders. Supply chain standardization is driven by economics rather than regulatory mandate. Going back say 10 years, the reaction to html was very similar yet today most report in this standardized Internet centric format. Why? Because it costs less than other formats. XBRL is simply the next step down a lower cost path.
Posted by Mike Willis | May 23, 2007 07:12am
The change won't happen until controllers see how it saves them effort instead of costing them effort.....
Posted by Paul Meisel | May 23, 2007 08:17am
The fact that CFOs don't know about XBRL is not a very useful metric. I doubt most CFOs can discuss their current means of filing SEC documents in any great detail. More important, the uptake of new data organizing technologies is an evolutionary process, so the fact that CFOs (or better COO/CIOs) are not jumping onto the bandwagon in great numbers is, again, hardly a surprise.
As the ability to share data via the various XML variants becomes better understood, the sale process is going to become far easier -- for vendors. We don't need the SEC to compell participation, but instead we need the IT industry to better demonstrate the utility of XBRL and other types of structured data.
Lastly, the same issues of uptake noted regarding XBRL are visible regarding the use of other XML variants for transaction data, for example, so the conclusions of the CSC study could be applied more broadly. Thus the bottom line: so what?
Posted by rc whalen | May 23, 2007 11:40am
Whatever one thinks of XBRL, it's essential to recognize that it's a truly international standard. Among its leading adopters are Japan, China, the Netherlands, Spain, and India. Chairman Cox may well see other nations moving forward, and he wants to ensure the US stays relevant and competitive. He may be head cheerleader, but there's a lot of rah-rahing on six continents.
Bob Schneider
Editor, Data Interactive (Hitachi's XBRL blog)
Posted by Bob Schneider | May 23, 2007 05:53pm
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Posted by Bridjette Hoilett Green | May 31, 2007 10:57am
CFO's, Controllers and others involved in business reporting can learn more about the reporting process cost/time reductions enabled by XBRL in the article 'ROI on XBRL: Interactive data cuts reporting costs today' here: http://www.aicpa.org/pubs/jofa/jun2007/stantial.htm
Posted by Mike Willis | June 03, 2007 08:16am
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