XBRL News

RDG Filings is committed to providing its clients with the best XBRL service(s) available. This includes keeping our clients up to date with XBRL Tagging ideas, XBRL service updates as well as recent XBRL Filings for better understanding of the XBRL filing process.

XBRL News & Blogs

Congress Sends The DATA Act to the President’s Desk for his Signature

April 30th, 2014

After unanimously passing the Senate in a vote on April 10^th, the DATA Act (Digital Accountability & Transparency Act) was unanimously approved by the House of Representatives on April 28^th. The bill will next be sent to the President for signing into law.

RDG joins all proponents of government transparency nationwide in thanking the DATA Act’s lead sponsors Rep. Darrell Issa (R-CA), Sen. Mark Warner (D-VA), Rep. Elijah Cummings (D-MD), and Sen. Rob Portman (R-OH) for championing this important legislation. We are also grateful to the Data Transparency Coalition and other groups who have worked so hard to push this bill through.

The law will require the federal government to comply with new standards for financial disclosure that utilize Structured Data technology, and it ensures that more and better data is published online. The DATA Act will usher in a new era of transparency for the U.S. government’s spending of taxpayer dollars. Structured Data will allow government spending information to be properly searched and analyzed, and will facilitate the elimination of waste and fraud.

Structured Data is the future of financial reporting, and it is already in wide use by public companies worldwide in the form of eXtensible Business Reporting Language (XBRL).

The DATA Act will open the government’s spending information and set the stage for meaningful spending reform. By creating documents with standardized, searchable data, this law is a huge step forward in the honest tracking of government expenditure.

Categories: H.R. 4164, SEC News, Structured Data, The DATA Act

The DATA Act Will Vastly Improve the Transparency of Government Spending

April 17th, 2014

On April 10^th, the United States Senate passed the DATA Act (Digital Accountability & Transparency Act) without objection. The legislation now returns to the House of Representatives, which approved its version of the bill last November with only one dissenting vote. The truly bipartisan DATA Act is expected to make it to the President’s desk for signing soon after the Congress returns from recess later this month.

The bill would require the federal government to comply with new standards for financial disclosure that utilize Structured Data technology, and it would ensure that more and better data is published online. The DATA Act has the potential to usher in a new era of transparency for the U.S. government’s spending of taxpayer dollars.

To date, government spending data has been locked away in archaic form types and inaccessible printed materials. These previously un-searchable documents were not widely or easily available to the public. Leveraging the potential of Structured Data will allow this information to be properly searched and analyzed, and with greatly improved transparency the public and private sectors will be able to work together to eliminate wasteful spending and identify fraud.

By creating financial disclosures with standardized, searchable data, the DATA Act is the first step in helping taxpayers and citizens to track where their dollars are actually going.

Research Data Group and RDG Filings applauds the DATA Act’s congressional sponsors and the Data Transparency Coalition for championing this important legislation.

For more information about the bill, please visit the congress.gov. See more from RDG here.

Stewart Walker – SVP, Director of Sales

415.643.6017

Categories: SEC News, Structured Data, Uncategorized, XBRL News

H.R. 4164 — Dubious Benefits & Destructive Consequences

March 12th, 2014

H.R. 4164, the Small Company Disclosure Simplification Act, is deeply flawed. The incorrect facts used to justify this bill are relatively insignificant compared to the bill’s inevitable and destructive consequences.

If this poorly considered bill manages to gain passage—either on its own or as an amendment to a larger bill—the partial elimination of the XBRL filing requirement would be deeply damaging to the national standards of public disclosure and financial reporting. Additionally, the SEC’s ability to discover investor fraud would be unnecessarily and dramatically hamstrung by this bill. Lastly, and rather ironically even by congressional standards, this bill will be considerably detrimental to the same companies that it is meant to help.

H.R. 4164 has been introduced by Rep. Robert Hurt of Virginia’s 5^th district and co-sponsored by Rep. Terri Sewell of Alabama’s 7^th district with the stated intent of reducing the compliance burden on smaller companies by eliminating their XBRL disclosure requirement. It is true that the bill would save some publically traded companies between eight and fifteen thousand dollars per year, but H.R. 4164 would have profound and pernicious impacts that far outweigh these dubious benefits.

Hurting Small Companies by Creating a Financial Reporting Caste System

The reduction in XBRL regulations proposed in H.R. 4164 would actually hurt the smaller companies it is designed to help. If this bill becomes law, and if XBRL becomes the standard for financial reporting only for large companies, smaller companies will be overlooked by financial analysts and institutional investors. Analysts and major investors will not have the tools necessary to discover opportunities among the smaller companies that are exempted from XBRL reporting. In the wake of H.R. 4164, future investment dollars will stream only to companies whose financial information can be clearly and transparently reviewed in the XBRL format. Exempting small companies from XBRL reporting will create a permanent underclass of less visible, and undiscoverable investment opportunities.

Putting Investors at Risk

The value of XBRL data goes beyond stock analysis. XBRL represents a significant improvement in the SEC’s ability to identify and eliminate investor and financial fraud by companies of all sizes. H.R. 4164 represents a massive regulatory loophole that a fraudulent company could drive an Enron-sized truck through.

Misrepresenting the Value of XBRL Data

Rep. Hurt’s press release of March 6, 2014 regarding this bill rehashes the specious claim that “evidence suggests that less than ten percent of investors actually use XBRL.” XBRL is not designed for the individual investor, but it is and will be of tremendous value to institutional investors and analysts and the companies they choose to invest in.

News Flash: The Stone Age is Over

XBRL is the future of financial reporting, and delaying its use will set the world of financial reporting and oversight back to a technology (HTML) that was developed in 1996. XBRL is a tremendous and necessary advancement, and instead of pushing a reversion to decades old standards, the government should be demanding higher quality, more transparent data.

Overstating the Regulatory Burden of XBRL

Rep. Hurt’s press release of March 6, 2014 includes the assertion that XBRL filing costs public companies “tens of thousands of dollars” annually. That may be true for those companies getting horrendously overcharged by their current provider, but not for those companies working with RDG Filings. RDG is among the leading XBRL service providers, and despite the fact that we provide the highest level of service and data quality available, our clients have annual costs significantly lower than the exaggerated costs put forward by Rep. Hurt.

An independent survey conducted by Financial Executives Research Foundation (FERF) indicated that the median cost for the most recent 10-K filing was $2,000 for smaller reporting companies. An XBRL exemption for smaller issuers would mean an annual savings of only $8,000. To be honest, the cost of XBRL reporting can vary depending on the complexity of the financials, but even at the highest end, the “burden” of XBRL reporting is not significant enough that the savings would outweigh the benefits of XBRL for both companies and shareholders.

Distorting of the Impacts of XBRL

Rep. Hurt’s press release of March 6, 2014 states that the XBRL requirement has “a negative effect on small companies, particularly innovative startups that need additional capital to expand their operations and grow.” The preponderance of recent data belies this claim. The IPO market is thriving again, even as XBRL is a known regulation these IPOs must accept. XBRL has had no evident impact on the currently robust IPO market.

The Obvious Conclusions

The long-in-short of the unintended consequences of this bill is simple: H.R. 4164 would kill hundreds of high-quality American jobs, create a divisive caste system of public companies, increase the risk of investor fraud, and hamstring smaller companies’ ability to earn future investment dollars. These sacrifices will be made in exchange for an annual savings of eight to fifteen thousand dollars for public companies.

H.R. 4164 is a bad bill, and it should not become a bad law.

Categories: H.R. 4164, SEC Compliance, SEC News, Small Company Disclosure Simplification Act, XBRL Filings, XBRL News

The Buried Lede in an Interesting Article from CFO.com: Ensure Your XBRL Data Is of the Highest Quality

January 6th, 2014

According to an online column on CFO.com by Nicolas Morgan and Jennifer Feldman, 2014 is a good year to ensure that your XBRL code is of the highest quality. Morgan and Feldman give their column — “No More Mr. Nice Guys: SEC Sharpens Talons for 2014” — a helpful subtitle:

“Don’t be complacent. The recent trough in the SEC’s enforcement of financial-reporting regulations will turn around this year.”

In addition to an alarming title, the article contains a series of warnings that could worry the Officers for any public company. As a result of an increasing “interest in pursuing enforcement of financial reporting regulations,” Morgan and Feldman write that the SEC “will be making more inquiries, analyzing more periodic reports and financial statements, and ultimately filing more lawsuits.”

This redoubled effort by the SEC to detect and prosecute fraud will include the new “Financial Reporting and Audit Task Force,” which was formed in July 2013 by the SEC’s Enforcement Division. This group will consist of “enforcement attorneys and accountants from across the country who will be tasked with identifying financial-statement, issuer-reporting and disclosure violations.”

The article certainly is attention grabbing, but we at RDG want to highlight the aspect of this article that is of immediate value to those companies with nothing fraudulent to hide, but who share the perfectly reasonable desire to stay out of the SEC’s search lights. Happily, this is also a thing that is completely within the control of companies themselves: Taking steps to ensure your XBRL data is of the highest quality.

Almost as an afterthought, Morgan and Feldman write that “one weapon in the task force arsenal is the much-discussed Accounting Quality Model (AQM), colloquially known as RoboCop. The SEC describes AQM as a quantitative analytic ‘model that allows us to discern whether a registrant’s financial statements stick out from the pack.’” What they do not mention, however, is that the RoboCop uses XBRL data as the first line of defense in its search for outliers.

For more helpful insight, we turn to a recent online article for Forbes, in which John Carney and Francesca Harker explain that “because RoboCop is an automated system looking for oddities, it is unable to account for mistakes made. This is particularly important because the AQM relies on the newly-mandated XBRL data which is prone to mistakes by the inexperienced. Sloppy entries could land your company’s filing at the top of the list for close examination.”

For those companies with nothing fraudulent to hide in their books, we like to think of investigation by the Financial Reporting and Audit Task Force as analogous to getting audited by the IRS when your taxes are properly paid but your From 1040 was filled out incorrectly. The IRS will find nothing amiss after the audit, but the process will be awful, time consuming, and expensive. This idea applies to your XBRL data. If your financial statements are in good order, but your XBRL is improperly built, the RoboCop may highlight your company as a candidate for further investigation. By ensuring your XBRL is of the highest quality possible, you can avoid any flag that the Accounting Quality Model RoboCop system might have otherwise raised.

We at RDG can help any SEC Filer who wants to know that their XBRL filings exceed SEC validation requirements, and will be in line with the enhanced standards, protocols, and guidelines already put forward by the FASB, the AICPA, the US-GAAP, XBRL-US, and others. RDG offers exhaustive XBRL Quality Assurance Services, and we have the knowledge, expertise, and experience to ensure that your XBRL documents are not vulnerable to the AQM-RoboCop and any future analysis tools deployed by the SEC.

Stewart Walker – SVP, Director of Sales

415.643.6017

Categories: Uncategorized

The 2013 FERF Survey: Doing XBRL In-House Requires 2.3x More Time and Resources than Utilizing a Full-Service Solution

December 3rd, 2013

The 2013 Financial Executives Research Foundation annual survey is out, and among a great deal of information is the fact that doing XBRL using in-house software requires far more time for the creation and review of filings than does utilizing a full-service solution.

Companies doing their XBRL in-house reported spending an average of 65 hours preparing the XBRL for their most recent annual filing and an average of 30 hours reviewing it. Compare that to companies utilizing a full-service solution, which reported spending an average of 28 hours preparing and 21 hours reviewing the XBRL for their most recent annual filing.

Doing XBRL in-house requires 2.3 times longer to prepare and 45% more time to review than utilizing a full-service solution.

In considering the option of bringing your XBRL processes in-house, one must consider not only the cost of licensing the software, but also the costs of staffing and operating the software. It takes both more time and human resources to do XBRL in-house. Large Accelerated filers reported having 66% more full-time employees working exclusively on SEC Filings than did smaller companies. Additionally, there can be considerable hourly costs for any necessary consultation or support. In-House software can work for certain companies, but the FERF survey shows that it requires more time, resources, bandwidth, and money than a full-service solution.

RDG Filings has made a consistent commitment to customer service, and we are proud to have set the standards for both service and XBRL data quality. Working with our unique full-service model will improve your filing procedures where the rubber for all four wheels meet the road – Service, Turnaround Times, Data Quality, and Cost.

Please get in touch with any questions.

Stewart Walker – SVP, Director of Sales

415.643.6017

Reference: William M. Stinnett, Financial Executives Research Foundation: SEC Reporting and the Impact of XBRL: 2013 Survey, pages 15, 18, 19, 27.

Categories: SEC EDGAR Filing, XBRL Filings, XBRL News

Congress Will Not Ban XBRL – pressure for improved quality will remain

October 24th, 2013

Along with the entire XBRL and Data Transparency community, RDG Filings has been closely following the proposed bill circulating through Congress on the committee level that would exempt as many as 80% of public companies from the XBRL requirement (see page four of this memo from the Financial Services Committee for details). RDG was not alone in thinking that the proposal would be an unfortunate step backward in the move toward increased transparency and availability of public companies’ financial disclosures. While there are certainly improvements to be made to both the data quality and to the SEC’s enforcement, RDG firmly believes that XBRL is a tremendous advancement and that rolling it back or doing away with it altogether would be a mistake.

Happily, today it was released that the bill will not be introduced, and the push to abandon or delay the XBRL requirement will stop (at least for the time being). XBRL has already been adopted by many countries around the world, and it is the future of financial reporting. RDG agrees with Columbia University’s Center for Excellence in Accounting and Security Analysis that there is a “clear demand for timely, structured, machine-readable data” among investors.

Much of the XBRL data that is currently required by and submitted to the SEC is not of a high enough quality to properly satisfy this demand, and Congress should continue to pressure the SEC to improve XBRL data quality. However, simply eliminating XBRL altogether is not a fix, it would, rather, just be a reversion to 1930’s technology.

Please get in touch with any questions.

Stewart Walker – SVP, Director of Sales

415.643.6017

Categories: SEC Compliance, SEC News, XBRL News, XBRL Quality Assurance

The Takeaway from the XBRL-US Conference – Data Quality Is Paramount

October 14th, 2013

RDG Filings was happy be at the recent XBRL-US Conference in Las Vegas on 23-25 September. As in years past, the conference provided an invaluable forum for the exchange of ideas from people across the entire XBRL spectrum. It was exceptionally informative, and the primary takeaway—from all perspectives—is that the quality XBRL data will be improving.

Daryl Issa, the Chairman of the House Government Oversight Committee, began the proceedings with a recorded statement that continued the themes of the critical letter he had written to the SEC only two weeks prior to the conference. Craig Lewis, the SEC’s chief economist and director of the Division of Economic Risk and Analysis, which oversees the SEC implementation of XBRL, followed with comments of his own that addressed the criticisms that had been lobbed at the SEC regarding data quality and enforcement. Lewis discussed the Accounting Quality Model (aka: AQM or “RoboCop”), which is an analytical tool that will trawl corporate filings to flag high-risk activity for closer inspection by SEC enforcement teams. In order to protect the “deterrence factor” of the tool, Lewis assiduously avoided giving details with regard to how RoboCop will work and what precisely it will be looking for. He made clear that he did not want to give away any secrets about the tool to protect against the discovery and exploitation of potential loopholes. When asked directly how companies can avoid being flagged by the RoboCop model, he would only go so far as to suggest that companies be sure to review their XBRL data prior to submitting it. He did say, however, that RoboCop will “not be a static model,” but rather will continually be updated and improved over time.

After these two introductory statements, the theme for the remainder of the conference was established, and for information you can see more of the presentations and panels here. The theme was XBRL data quality. The SEC itself talked about their mechanisms for enforcing enhanced quality, analysts and other end-users of XBRL data discussed the varying usability of shabby versus quality data, and there were a number of sessions on the proper creation of XBRL code. RDG was very happy to be at the conference both to continue enhancing our expertise and to introduce our XBRL Quality Assurance Services.

The end of the limited liability period in combination, the SEC’s recent movements toward increased enforcement, and the inability to analysts and other end-users to utilize the existing data have all combined to push XBRL data quality to the forefront of the conversation. Many of the companies we spoke with at the XBRL-US Conference had been in touch with their audit firm about potentially reviewing the XBRL files, and they were glad to learn about what we can offer as an alternative. RDG’s QA Services are similar to what you might receive from an audit firm, but there are additional aspects to our service that offer greater value. Briefly put, our QAS include:

1) Access to a dedicated XBRL expert CPA from our QA team

2) Detailed, manual, CPA review of your XBRL files

3) Application of the most robust automatic validation tools available

4) Full set of easy to read reports and consultation with your XBRL expert CPA to review findings.

RDG brings something vital to the table that most audit firms do not. We offer the manual CPA review of your XBRL filings, but we also have years of experience actually constructing XBRL filings. That experience gives us knowledge and expertise to more effectively de-construct and review XBRL filings than an audit firm that has never created an XBRL filing. RDG’s CPA expert will thoroughly analyze your filings, applying the regulations established in the EDGAR Filing Manual and adhering to XBRL best practices as established by the FASB, the AICPA, and the XBRL-US Consortium in order to ensure precision and compliance in the four primary aspects of XBRL filings: Accuracy, Completeness, Mapping, & Structure. Additionally, we will also work with you to clearly explain our recommendations and work with you to implement those changes.

Please get in touch with any questions, or if you’d like to setup a call or demonstration to learn more about what we can do for you.

Stewart Walker – SVP, Director of Sales

415.643.6017

Categories: SEC Compliance, XBRL Filings, XBRL News, XBRL Quality Assurance

Daryl Issa vs. The SEC? Not So Much. They’re On The Same Page About XBRL Quality

September 19th, 2013

The chatter and the headlines have been pretty excited. “The House Government Oversight Committee Chides the SEC Over Low Quality XBRL Data” is about as exciting as political theater about XBRL can get. However, this kerfuffle actually means only one thing: The quality of XBRL filings is going to have to improve, and soon.

When Daryl Issa, the typically anti-regulation Republican Representative, calls the Obama-appointed Chair of the SEC, on the carpet over the quality of the XBRL data, the take-away is bigger than political bickering — It’s that the movement toward a higher standard for XBRL filings is now too fast for a u-turn. XBRL is here to stay; only the height of the bar will change.

With his September 10^th letter, Daryl Issa openly questioned the SEC’s efforts to move toward the use, analysis, and enforcement of XBRL data. Even a cursory glance at the code being created by in-house filers and by some of the outsource providers will show that Issa’s criticism is completely valid. Additionally, if his numbers are accurate—1.4 million errors found with zero Comment Letters sent—the SEC has a fair amount of work to do to bring a critical mass of the XBRL filings in line with the necessary standards of usability. All that being said, however, one cannot rightfully conclude that Mary Jo White, the SEC Chair, is not committed to XBRL or the enforcement of a higher standard for it. Since her appointment to the Chair, she has established three new fraud detection initiatives that will certainly be utilizing XBRL data as a primary element. The SEC has also recently rolled out its AQM-Robocop tool that will be analyzing XBRL quality on an automated basis every day.

The House Government Oversight Committee wants enforcement of higher quality XBRL data, and the SEC already agrees. If you’re an SEC Filer, it’s time to be certain your filings are of the highest quality possible.

RDG Filings offers exhaustive XBRL Quality Assurance Services. RDG has the knowledge, expertise, and experience to ensure that your XBRL documents are usable for the analysts and not vulnerable to the AQM-RoboCop and any future analysis tools deployed by the SEC.

Stewart Walker – SVP, Director of Sales

415.643.6017

Categories: SEC News, XBRL News, XBRL Quality Assurance

Don’t Rely on Software Alone to Build and Validate Your XBRL Filings

August 22nd, 2013

There is no XBRL without computer software. The entire endeavor is designed to allow for corporate financial statements to be machine readable and comparable by automated analytical software.

Computer code is the foundation of XBRL, and a large number of companies are selling excellent tools for the creation, utilization, and validation of XBRL code. However, an equally large number of companies have touted the ability of their software to be the only tool necessary to ensure the compliance, quality, and accuracy of XBRL filings. Without denying the centrality of software, RDG believes that the promotion of automated tools alone overlooks the importance of the most important and powerful tool available – the human brain.

It may be trite, but it’s also true. Corporate filers that rely solely on software systems to build and validate their XBRL filings do so at their own peril. The Limited Liability period is over, and the SEC has already rolled out three new fraud detection initiatives all made possible by the RoboCop automated enforcement tool that will automatically trawl through XBRL filings immediately upon filing.

After your XBRL filing is submitted to the SEC, it will be analyzed by computers for both government enforcement and financial analytics purposes. Computers will be picking over your XBRL code, do you really want it to have been built and validated by computers alone?

The fact is that due to the nature of XBRL (and of course to the nature of corporate accounting), there is no way to remove the human element from the process altogether. Even the creators of the most robust validation software tools available admit that software can only go so far in checking the accuracy of XBRL code. To properly analyze and ensure the highest quality XBRL, a person with experience and expertise must be involved. To be sure, RDG employs the assistance of numerous validation software tools, but we consider the close attention of a XBRL Professional CPA to be the most important aspect of our Quality Assurance processes.

Just as it would be impossible to audit financial statements with automated software, XBRL code cannot be properly vetted by machines alone. RDG Filings has the knowledge, expertise, and experience to ensure that the AQM-RoboCop tool being deployed daily by the SEC is far less likely to flag your XBRL filings.

Categories: SEC Compliance, XBRL Filings, XBRL Quality Assurance

XBRL Is Increasingly Becoming The New Standard

August 15th, 2013

Back in April – in a development that RDG Filings was rather excited about – Citi, The Depository Trust & Clearing Corporation (DTCC) and XBRL US announced that Citi had begun “sending XBRL-formatted dividend announcements related to ADRs for which it is the depositary bank to DTCC through The Depository Trust Company.”

While this development was not directly related to RDG Filings day-to-day work as a SEC Filings agent that specializes in full-service XBRL filing for corporate and mutual fund filers, we were pleased to see the value and importance of XBRL financial reporting enthusiastically endorsed by Citi and the DTCC.

Alan Smith, Managing Director, Citi Securities and Fund Services (SFS) said, “We’re pleased that Citi has taken a key role in an initiative that ultimately will result in better, faster and much less expensive data for the marketplace.”

And Dan Thieke, DTCC Managing Director, Asset Services said that with the DTCC receiving “thousands of announcements from issuers and intermediaries every day. XBRL enables us to take that information directly into our systems without manual intervention, thereby reducing risk and cost and boosting efficiency and accuracy.”

XBRL is the future of financial reporting, and the value of this relatively new tool is contingent upon the quality of the code created. RDG Filings is committed to the present and future of XBRL reporting, and as major part of that commitment, RDG is committed to creating the highest quality XBRL possible.

Categories: XBRL News, XBRL Quality Assurance