Historically, the conversation about XBRL has centered on public companies, thanks to its promise of delivering timely, accurate, and transparent financial information to investors. That conversation is beginning to shift, though, thanks to projects like the one undertaken by the Maryland Association of CPAs (MACPA).
In an effort to demonstrate XBRL's scope and versatility, the MACPA is using the data-tagging language to populate its financial information and key performance indicator reports. The project could become a blueprint of sorts for how private companies and not-for-profit organizations can take advantage of XBRL's power.
With XBRL, the MACPA is producing better financial information in less time and with greater efficiency. It may eventually begin filing its Form 990 tax return via XBRL as well, turning a lengthy filing process into one that can be done "with the press of a button", says Skip Falatko, MACPA Director of Finance and Administration.
"XBRL would be an excellent application for the nonprofit community", said Falatko. "There are about a million and a half nonprofits in the United States, and probably hundreds of thousands of them file the 990 every year. If they were to file those reports via XBRL, it would greatly increase and improve accountability, transparency, and comparability in the nonprofit world, so you would have a much easier approach for comparing nonprofits than we currently do."
To keep the project's costs low, the MACPA enlisted the skills of intern Thomas Hood (son of MACPA President Tom Hood), a Salisbury University accounting student with an extensive technology background. XBRL cofounder, Eric Cohen, provided guidance and advice along the way. "Our ability to take this in-house, implement it, and see benefits fairly quickly at a pretty low cost made us realize that XBRL is real and can really help", said Hood.
"I appreciate so much that the MACPA has set this example", added Cohen. "Here is the profession taking a stand, being a leader, serving as an example to other CPAs, and helping them see the way so that we can take this changing business-information environment and not just react to it, but act to turn it into what we want it to be. The CPA Vision Project talked about making sense of a changing and complex world. This is a great example of how the profession can do that."
The MACPA partnered with software provider Altova, whose MissionKit suite of products transformed the association's internal accounting data into XBRL format. Specifically, XMLSpy, MapForce, and StyleVision were used to customize, map, and publish its XBRL data into content that can be shared among its members and other nonprofits. The software's intelligent wizards, graphical drag-and-drop design models, and various code-generation capabilities provided an efficient and user-friendly experience.
"The MACPA has showed that not only can the benefits of XBRL extend to smaller companies, but they also brought the project in-house, did it very cost-effectively, and experienced some tangible benefits", said Altova's Beth O'Brien. "It's a model case study."
Altova produced a white paper that examines the MACPA's project in detail, which you can read in its entirety.
The Maryland Association of Certified Public Accountants is a statewide professional association that provides leadership, information, and services for its nearly 10,000 CPA members, who are employed in private practice, industry, government, and education. CPAs are business and financial professionals who have passed a rigorous two-day examination in order to be licensed by the state. CPAs are committed to protecting the public interest and must adhere to stringent ethical and professional standards and continuing professional education requirements.