ICYMI: Here Are Some Accounting Execs Talking About How Useless XBRL Is

The mandatory use of eXtensible Business Reporting Language by large public companies began in 2009 and was extended to smaller filers in 2011. And while it has made searching for SEC filings a breeze, it was the sincere hope of the SEC that XBRL would also be a serviceable tool for companies to do similarly fancy data analysis for their internal purposes. Well, it didn't happen!

Yes, XBRL may be nice and slick for those people that like cruising 10-Ks and 10-Qs for useful information, accounting brass around the country aren't so convinced and CFO recently got some testimonials from those who are less than impressed. 

For starters, it's hasn't amounted to much, other than an exhaustive compliance exercise. 

“I really just think it’s a regulatory platform right now. This is something we need to comply with. This isn’t something we find useful. This isn’t something I’ve heard my analysts say is useful,” said Nick Cyprus, vice president, controller and chief accounting officer at General Motors
Plus, regulators basically re-invented the wheel:
“The regulators thought that most companies would eventually use this data tagging internally. But we see absolutely no use for it. It’s just redundant to what we already have,” adds Stephen J. Cosgrove, vice president, corporate controller, and chief accounting officer at Johnson & Johnson

And it's not practical, according to Ken Kelly, the controller at McCormick & Company:

“It was a nice theory.”

But a funny thing happened on the way to XBRL implementation says Michael Kaplan, a partner at law firm Davis Polk:

“It’s really meant for the investing community on Wall Street,” says Kaplan. The SEC initiated the automated financial reporting requirement to help investors (as well as the SEC) to more easily compare financial information across corporations.  
In other words, your superfluous red tape is their teasure trove of useful information. Try to think of the investors for once. 

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

Which Firm Had the Most IPO Audit Clients In Q1 2021?

The SPAC bubble didn’t burst during the first quarter of 2021. Of the 407(!) initial public offerings in U.S. markets between Jan. 1 and March 31, 298 (73.2%) involved blank check or special-purpose acquisition companies, according to a new analysis from Audit Analytics. In total, the 407 IPOs raised nearly $134.7 billion—an increase of more […]

New SOX In the U.K.? It’s (Probably) Coming Soon

The February gloom was broken recently by the news that the British government will be introducing reforms targeting company financial reporting and audit oversight. In truth, none of this should be a surprise. There have been several accounting scandals in recent years where the directors of various companies have been unscrupulous and their external auditors […]