The Socio-Economic Impact of Xbrl Usage

Résumé du livre

Due to ever-increasing demands on the corporate reporting supply chain (i.e., regulators, lender, investors, etc.), there is an urgent need to eliminate the labor-intensive processes currently used to produce business reports. Monumental sums of money, time, and other resources are being wasted on mundane data entry tasks, rather than on critical data analysis tasks. Thus, regulators lack the time to properly analyze public company reports. As a result, accounting scandals like Enron and WorldCom have rocked the accounting profession and have severely harmed various accounting information stakeholders. EXtensible Business Reporting Language (XBRL) represents a data standard for reporting capable of significantly narrowing the reporting gap between public companies, regulators, and interested members of society (i.e., banks, investors, etc.). Through the use of tags, XBRL provides a standard language for reporting both financial and nonfinancial information not previously seen in the reporting environment. As a result, interested stakeholders can gain access to public information much more quickly and transparently than ever before. The current paper examines corporate and regulatory usage of XBRL-enabled software and its effects on various stakeholders. Evidence is provided indicating international XBRL usage would result in significant efficiency and data access gains to capital market participants, as well as taxpayers, labor unions, and regulators. Potential significant cost savings resulting from XBRL usage are also discussed.