If the Securities and Exchange Commission is dragging its heels on enforcing the quality of data gathered through XBRL, then the market will do what it can to enhance quality on its own.
That’s the driver behind the new XBRL US Center for Data Quality, formed by the XBRL US consortium and five major filing agents to try to improve the usefulness of XBRL financial data by improving the quality of information entered into the interactive data system. “This is an effort by the industry to say this data is not only useful for regulators, but also to the members who want to use it,” says Campbell Pryde, president and CEO of XBRL US. “The interest of the market is to collect this. The point is to let the market be the initiator, so when the data comes in it has higher utility.”
XBRL is a global standard for digitally exchanging business information that facilitates understanding and oversight of corporate performance, says the Center for Data Quality. Persistent errors in XBRL filings, which have received only scant attention from the SEC, have hindered more widespread use of data provided through interactive filings, critics have said.
The center will channel support and action through the XBRL US Data Quality Committee to address the public’s concerns about XBRL financial data being reported to the SEC. The center plans to develop guidance to provide for uniform, consistent tagging of financial data and to clarify those specific circumstances where custom tags are appropriate. It also plans to develop automated validation rules to detect input errors and verify compliance with the committee’s guidance.
The committee’s validation rules will be contributed to the Arelle open-source XBRL platform and will be freely available for use by XBRL software providers, public companies, and others. Committee meetings will be open to the public, and the proposed guidance and validation rules will be released for public comment before they are approved for final publication. The Financial Accounting Standards Board will be involved with the committee as an observer, and the committee plans to keep SEC staff advised of the committee’s progress.
In addition to XBRL US, founding members of the center include representatives from Merrill Corp., RDG Filings, RR Donnelley, Vintage, and Workiva. Additional contributors will come from organizations such as Bloomberg, Credit Suisse Holt, Calcbench, CFA Institute, S&P Capital IQ, Vanderbilt University, and the American Institute of Certified Public Accountants.
“Members of the committee are truly representative of the industry,” says Michelle Savage, vice president at XBRL US. “The idea was to bring together all stakeholders, including consumers, service providers, companies. “That’s how XBRL US began, as an industry initiative.”