Financial Executives International recently published their report on the financial industry’s transition to XBRL : SEC reporting and The Impact of XBRL: 2012. To find out how companies are handling SEC reporting and compliance with XBRL tagging requirements, The Financial Executives Research Foundation surveyed executives and SEC reporting professionals from 416 unique companies.
What do the FEI findings mean for businesses in 2013?
- Companies across the board will take greater responsibility for their XBRL filings. The survey found that respondents for all classes of SEC reporting companies projected increasing both the size of their XBRL team as well as the level of internal XBRL competency. This will mean a decrease in XBRL outsourcing. In the FEI survey, the biggest concern raised regarding XBRL compliance was to question the cost – benefit proposition of the XBRL mandate. This may explain companies’ interest in taking charge of their own XBRL filings.
- Businesses will not be delaying their reporting calendars. The vast majority of respondents (98% of large accelerated filers, 91% of accelerated filers, 96% of non-accelerated filers, and 86% of smaller reporting companies) indicated an expectation to file in line with the time frame of previous filings or faster.
- Companies will look at alternatives to streamline the XBRL process and software vendors will begin to upgrade their products to make them more user-friendly. The survey reported that XBRL was the most-often mentioned SEC reporting bottleneck across all SEC reporting groups in 2012. Companies will be looking for better options and digital filing will become more prevalent.
- There will be a more holistic approach to corporate reporting. Increased pressure from special interest groups along with the recently mandated reporting on conflict minerals are expected to lead to increased sustainability reporting in the coming years. The survey stated that sustainability reporting was much more prevalent among the largest company respondents to the survey (44% of respondents with over $10 billion in annual revenue, 33% of respondents with $5 to $10 billion in annual revenue, and 9% of respondents with $1 to $5 billion of annual revenue).
Another prediction is that the quality of XBRL filings will go up. The SEC has been complaining about the quality of the filings (see link below). There is a steep learning curve and XBRL filings will improve as filers become more proficient and as buyers of software and services become more savvy. It will also become more difficult for unqualified vendors to sell their products and services.
The complete results of the survey can be found on the FEI website: www.financialexecutives.org
Link to Compliance Week article on the quality of XBRL Filings: www.complianceweek.com/sec-calls-again-for-corrections-in-xbrl-filings/article/271318/