Complying with the XBRL requirements of the US Securities & Exchange Commission presents an opportunity to streamline the flow of financial information throughout the business and reduce the need to re-key and reintroduce it. But because financial data is managed in silos, this opportunity is being missed.
‘In most companies, the XBRL conversion is managed by finance staff as a bolt-on exercise after the financial statement close,’ said Ariel Markelevich, the associate professor of accounting at Suffolk University whose research focuses on how XBRL is regulated in different countries. ‘It would make a lot of sense to integrate the information flow between financial accounting and managerial accounting staff, to make better use of the data in the XBRL format.’
The SEC demand for XBRL-tagged data means that many companies are already designing or redesigning their information flows and the associated processes. ‘If a company can go back to its information flow and look for where in the company there is information that is used in several places, there may be a way to unify the tagging of information so that it can be accessible in those different places,’ suggested Markelevich, adding: ‘It may be more efficient.’