“Accounting is the language of business”, Warren Buffett once proclaimed. Being one of the most famous investors of all time, we are sure that all of us can learn from his great wisdom.
Accounting is the main mechanism used by corporations to communicate their financial performance and stability, and it is the main source of information that investors rely on to evaluate potential investments. In fact, the SEC holds companies accountable for their accounting practices by issuing Comment Letters to raise accounting-related issues.
So, if investors and the SEC view that companies should be accountable for their accounting, shouldn’t they also hold companies accountable for their XBRL data quality?
This is a philosophical question since we have not (yet) seen any SEC enforcement actions or substantive SEC Comment Letters pertaining specifically to the quality of a company’s XBRL financial statements. Nor have we seen investor class action lawsuits based on the reliance of incorrect XBRL data in the financial statements produced by the company.
So, why should companies care?
The Higher Calling of an Accountant
Doctors and nurses save lives. Scientists discover new cures to save whole societies. Teachers educate and inspire future generations of productive individuals.
What is the altruistic, higher calling of an accountant? Drawing on Mr. Buffett’s quote that accounting is the language of business, accountants are the lifeblood of companies and play an essential role in the efficient functioning of the capital markets.
How do we measure the success of an accountant in corporate America?
Reporting in compliance with the accounting standards to start with. Producing financial statements that appropriately reflect the economic performance and financial condition of the company. Accurately capturing and recording corporate transactions. Stakeholders rely on this information produced by accountants to make decisions and implicitly rely on the hallmarks of these success measures. However, there is one missing piece - all of this information is now reflected in the XBRL data of a company’s financial statements which is used for analyses.
The high-quality XBRL data is a key ingredient to these outputs of success.
idaciti's Role in Promoting Healthy Capital Markets
We founded idaciti because we wanted to be a part of the ecosystem to promote the efficient functioning of the capital markets.
Our goal is to play a role in streamlining the flow of consistent and high quality data from companies to investors, and help ensure that investors have access to the important data that accountants in corporate America produce. We are passionate about data quality and actively engage with the XBRL community, by participating on the XBRL advisory committees at the FASB and IFRS Foundation, and the XBRL US Data Quality Committee.
We created the idaciti Inline XBRL Viewer (based on the open-source code from the SEC) because we believed that we had a unique view on "HOW" external reporting professionals can navigate and review their own and their peer companies' iXBRL filings.
What if you can perform benchmarking within the context of the filing? What if you can review the tags you chose and see if your peers are using the same? What if you can run a set of checks to verify the validity and consistency of your tagging? We wanted to create an application that was sleek, intuitive, and interactive. And we wanted all external reporting teams to benefit from the interactive data that was making the lifeless data come alive and take the pain out of performing validations and check for tagging & reporting consistencies.
Leaning in to Your Higher Calling
Medicine, teaching and science have long been viewed as noble professions. Let’s add accounting to that list. We would like to encourage accountants in corporate America to lean in to this higher calling by focusing on XBRL data quality, consistency and transparency. Partner with us in this mission.
What is your ‘accountant’-ability?
Try idaciti Inline XBRL Viewer for Free for Your Next Inline XBRL Filing -- All Advanced Validation Features Included
Please contact info@idaciti.com to arrange a short introductory/on-boarding call and get free trial licenses of the Inline XBRL Viewer for you and your external reporting team. After the trial ends, you can still access our Inline XBRL Viewer Lite (interactive trending and benchmarking available) for as long as you like.
