Reporting is an essential aspect of corporate governance and is crucial for stakeholders to make informed decisions. The accuracy and quality of reporting data is a critical factor that investors and regulators look for when evaluating a company. With the growing volume of data in every country across the globe, companies are turning to technology to streamline the reporting process and improve the quality of information being produced. eXtensible Business Reporting Language (XBRL) is one such technology that is becoming increasingly popular for reporting different types of information and is only getting started.
What is XBRL?
XBRL is an open-source, XML-based language that provides a standardized format for reported data. It allows companies to tag and structure reported information in a way that is easy to analyze and compare. This structure allows for automated data extraction, making the reporting process more efficient and reducing the risk of human error. With XBRL, reported data can be easily shared between companies, regulators, and other stakeholders, enabling them to make better-informed decisions.
How XBRL Improves Data Quality and Accuracy
One of the key benefits of XBRL is that it enables companies to provide more accurate and consistent data by using a standardized, pre-defined format. XBRL helps to eliminate inconsistencies in financial and regulatory reporting and can improve the accuracy of the information captured and analyzed. Reducing the amount of manual filing and parsing of information leads to less risk of human error and improves the comparability of financial information across companies and industries. As a result, stakeholders can make better-informed decisions based on accurate and reliable information.
XBRL also makes it easier for companies to report information in a timely manner. With XBRL, companies can automate the reporting process, reducing the time and resources required to prepare and complete the regulatory filing process. This allows companies to provide information more quickly, which is important for stakeholders who need to make informed decisions.
In conclusion, XBRL is an important technology that has already started to, and the potential to greatly, improve the quality and accuracy of regulatory reporting. By standardizing the format of data sets in advance and automating the reporting process, XBRL can help companies provide more accurate, consistent, and timely information. This benefits stakeholders who rely on company or industry information to make informed decisions. As the volume of XBRL data continues to grow, the easier the creation and use of the data becomes.