Florida Atlantic University
Instructor Renee de Roche
June 7, 2012
Extensible Business Reporting Language (XBRL) is a standards- based language that facilitates the interchange of interactive financial information via electronic communication.(FFIEC, 2006). The idea behind XBRL is straightforward- a digitized version of the text of the financial statement. XBRL treats specific identifiable information in a financial statement as an individual item and utilizes an electronic tag which can only be read or searched by a computer. (SEC, 2009) Because each tag is computer readable it allows for automated processing of business information by computer software, thus possibly reducing the potential for human transcription error. As a student of accounting, I was interested to find if XBRL inaccuracy could prove problematic for companies required to file using this relatively new technology.
The XBRL software can recognize , analyze , convert , and store data. XBRL can read and translate different languages and reporting standards. XBRL increases the speed of handling of financial data and allows for automatic checking and comparison of data, thus making the data “interactive”(FFIEC, 2006). According the United States Securities and Exchange Commission (SEC) , Interactive data allows investors and others to more easily pinpoint facts and figures in lengthy disclosure documents ( SEC 2009). In 2009 The SEC made XBLR tagging of disclosure information mandatory for certain operating companies, mutual funds and credit rating agencies (SEC, 2009). The SEC projected that this change would provide better integrity and uniformity among financial statement users and would also allow for better communication of publicly owned companies’ financial records for use in the decision-making process. By the adoption of XBRL, companies and end users of financial data- analysts, investors, financial institutions,... [continues]
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