US auditors worry about XBRL costs
Auditors' body warns US regulator over blanket acceptance of electronic tagging for filing financials before assessing its effectiveness
Auditors want the Securities and Exchange Commission to adopt a wait and see
approach before requiring all US firms to file financial statements using new
technology.
The Center for Audit Quality sounded a
note of caution about universal acceptance of XBRL, extensible business
reporting language, following SEC’s announcement yesterday that 500 of the
largest public companies would begin filing their financial data this way in
early 2009.
Executive Director Cindy Fornelli said: ‘It is imperative the Commission
seeks input during the three-year phase in period from preparers about their
experiences and the related costs, and from investors about their experiences
and the related benefits. These insights would allow the SEC to make a more
informed decision about whether broadly mandating XBRL is likely to generate
benefits in excess of costs.’
XBRL electronic tags are like bar codes and can be attached to each piece of
financial data. The SEC has been running a voluntary pilot programme with more
than 70 companies filing their financial data in XBRL. It wants all companies to
file their report this way by 2011.