Featured Research

from universities, journals, and other organizations

SEC-mandated XBRL data at risk of being irrelevant to investors and analysts

Date:
January 22, 2013
Source:
Columbia Business School
Summary:
Scientists recently completed a review of the state of XBRL, with a focus on its usefulness and usability for security analysis.

In 2009, the Securities and Exchange Commission mandated that public companies submit portions of annual (10-K) and quarterly (10-Q) reports -- in a digitized format known as eXtensible Business Reporting Language (XBRL). The goal of this type of data was to provide more relevant, timely, and reliable "interactive" data to investors and analysts. The XBRL-formatted data is meant to allow users to manipulate and organize the financial information according to their own purposes faster, cheaper, and more easily than current alternatives.

But how useful and usable is the new data to analysts and investors? The authors, early proponents of interactive data, from Columbia Business School's Center for Excellence in Accounting and Security Analysis (CEASA) recently completed a review of the state of XBRL, with a focus on its usefulness and usability for security analysis. The study questions the reliability of the data, the simplicity and stability of the underlying taxonomy and architecture, as well as the lack of user tools that add value and are easily integrated into an investor's or analyst's existing work flow and tools. As a result, the researchers conclude that XBRL has promised more than it has delivered to date and is at risk of becoming obsolete for use by analysts and investors.

However, the authors recommend specific changes that could make the formatted data more useful to investors and analysts. First, the entire XBRL stakeholder community must reduce significantly the error rate and limit unnecessary "extensions" (company-specific data identifiers or "tags"). Steps that might achieve this include: greater regulatory oversight and enforcement, mandatory audits of the data and tags, or requirements around meeting the XBRL US organization's error and quality checks. Second, the entities that file the XBRL-formatted financial reports should focus their energy on improving the quality of their data, rather than on trying to destroy the SEC's XBRL regulation. Third, the ongoing development of XBRL technology should be taken over and run by technologists, rather than accountants and regulators. An interesting approach for this might include partnering with major business information system vendors (like IBM, Oracle, and SAP), the key web-based financial information suppliers (like Google and Yahoo), and possibly even the major data aggregators (Bloomberg, CapitalIQ, Factset, and Thomson Reuters) not only to ensure that the SEC's regulatory data can be used effectively by investors and analysts, but, more importantly, to help improve the XBRL technology and usability overall.

"The potential for interactive data to democratize financial information and transform transparency remains stronger than ever, and many investors and analysts wish that the data were more useful today," the researchers wrote in the study. "But unless stakeholders focus on improving the data's reliability and on creating value-added, easily integrated tools, XBRL-tagged data is unlikely to be used by a significant number of investors or analysts."


Story Source:

The above story is based on materials provided by Columbia Business School. Note: Materials may be edited for content and length.


Cite This Page:

Columbia Business School. "SEC-mandated XBRL data at risk of being irrelevant to investors and analysts." ScienceDaily. ScienceDaily, 22 January 2013. <www.sciencedaily.com/releases/2013/01/130122143107.htm>.
Columbia Business School. (2013, January 22). SEC-mandated XBRL data at risk of being irrelevant to investors and analysts. ScienceDaily. Retrieved April 23, 2014 from www.sciencedaily.com/releases/2013/01/130122143107.htm
Columbia Business School. "SEC-mandated XBRL data at risk of being irrelevant to investors and analysts." ScienceDaily. www.sciencedaily.com/releases/2013/01/130122143107.htm (accessed April 23, 2014).

Share This



More Computers & Math News

Wednesday, April 23, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Monkeys Are Better At Math Than We Thought, Study Shows

Monkeys Are Better At Math Than We Thought, Study Shows

Newsy (Apr. 23, 2014) A Harvard University study suggests monkeys can use symbols to perform basic math calculations. Video provided by Newsy
Powered by NewsLook.com
High Court to Hear Dispute of TV Over Internet

High Court to Hear Dispute of TV Over Internet

AP (Apr. 22, 2014) The future of Aereo, an online service that provides over-the-air TV channels, hinges on a battle with broadcasters that goes before the U.S. Supreme Court on Tuesday. (April 22) Video provided by AP
Powered by NewsLook.com
Aereo Takes on Broadcast TV Titans in Supreme Court Today

Aereo Takes on Broadcast TV Titans in Supreme Court Today

TheStreet (Apr. 22, 2014) Aereo heads to the Supreme Court today to fight for its right to stream broadcast TV over the Internet -- against broadcasters who say the start-up infringes upon copyright law. TheStreet Deputy Managing Editor Leon Lazaroff explains the importance of the case in the TV industry and details what the outcome of it could mean for broadcasters and for cloud storage services -- as Aereo allows its subscribers to not just watch live TV shows but also store content to a DVR in the cloud. Video provided by TheStreet
Powered by NewsLook.com
Lytro Introduces 'Illum,' A Professional Light-Field Camera

Lytro Introduces 'Illum,' A Professional Light-Field Camera

Newsy (Apr. 22, 2014) The light-field photography engineers at Lytro unveiled their next innovation: a professional DSLR-like camera called "Illum." Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins