The majority of public companies did little to change their XBRL filing process even as their limited liability through the start-up phase expired and the Securities and Exchange Commission called on companies to correct persistent mistakes.
The 2013 XBRL survey conducted by the Financial Executives Research Foundation shows 58 percent of the 402 companies who participated in the survey took no new action to change anything about their XBRL filing process as XBRL exhibits transitioned from “furnished” to “filed” in the view of the SEC, giving it the same liability weight as regular filings. Through a three-year, phased approach to XBRL adoption, the SEC gave companies two years worth of modified liability to give them time to learn to use XBRL. For most companies, that liability protection has expired, and it will expire entirely for all companies by October 2014.
The survey says 55 percent of large accelerated filers and accelerated filers took no new measures, while 70 percent of non-accelerated filers and 79 percent of smaller reporting companies changed nothing in their XBRL processes. Of those that took more proactive measures, the majority said they added process documentation to beef up their XBRL process. Only 11 percent of companies said they saw more involvement in the XBRL preparation by senior management or the CFO. Two percent saw more involvement of the board or audit committee, and only 4 percent said they got their auditors involved.
A little more than half of companies also said through the survey that they made no changes to their financial statements as a result of filing them in XBRL, but 48 percent said the XBRL filing process caused some changes to the financial statements themselves. One-third of companies that reported making changes said they converted some text disclosures to tables, and nearly one-third said they removed some disclosures that are not required by Generally Accepted Accounting Principles or other regulations. Only 2 percent said they added disclosures that were not somehow required as a result of the XBRL filing requirements.
The SEC has pointed out persistent routine errors in XBRL filings and called on companies to correct them, although the SEC also has been criticized for doing too little to clean up XBRL filings. A study last year concluded investors and other users of financial statements are not using data produced by XBRL because they don't trust it. Congress has called on the SEC to answer questions about why it's not taking more proactive measures to make XBRL more useful for everyone.