AICPA Welcomes SEC's Proposed Rule on Use of XBRL
In response to last week’s proposing and concept releases by the U.S. Securities and Exchange Commission (SEC) on XBRL-Tagged Data in Commission Filings, the American Institute of Certified Public Accountants (AICPA), believes this is an ideal time for companies to embrace the XBRL (Extensible Business Reporting Language) standard as an important step in helping to enhance and modernize financial reporting. The SEC is proposing that filers to the EDGAR system tag individual facts and figures in their financial statements using XBRL in a voluntary filing program to begin in 2005 and is also seeking public comment on alternative reporting methods and the costs and benefits associated with XBRL-tagged data.
"XBRL benefits the entire business reporting value chain, including the companies that prepare financial reports, as well as the capital markets and investors who rely on and use this information. In addition, XBRL improves the timeliness of financial information and accuracy of data in SEC filings," said Barry Melancon, President and CEO of the AICPA. "We encourage the accounting profession to comment on the Concept Release and support the use of XBRL in SEC filings. We urge public companies to consider the benefits of XBRL and adopt it as part of their reporting processes.”
For AICPA members who serve in financial management, auditing, and information technology roles, XBRL will streamline the preparation of business and financial reports for internal and external decision making.
XBRL will significantly improve the ability for CPAs in financial management to more precisely direct and publish financial information to investors, regulators, analysts, lenders and other key stakeholders. Moreover, the CPA profession is proactively fulfilling its primary mission to protect the public interest as XBRL will improve investor access to the capital markets and increase analyst coverage.
In late 1999, the AICPA continued to address transparency and other business reporting issues by helping start the XBRL initiative. The AICPA is a founding member and host of XBRL-US and is participating in a global consortium of more than 250 of the world’s leading accounting, financial services, technology and regulatory organizations to develop a standard for XBRL and the specific “dictionaries” of XBRL tags (i.e., the taxonomies) that software applications will use to attach the tags to financial data. These XBRL dictionaries have been created to work with U.S. GAAP, other country-specific GAAPs, and International
Accounting Standards. For more information, please visit www.xbrl.org.