Corporate reporting must evolve to keep up with a digital world

Technology and the unprecedented availability and immediacy of information has changed the business world. Corporate reporting has not embraced technology in the same way. We hosted a discussion on digital reporting technology to learn more.

User is king in our increasingly digital world

On October 25, 2017, CPA Canada and XBRL Canada assembled a panel of experts to share insights on evolving corporate reporting practices in an increasingly digital world, and how companies can adapt using technological advancements including eXtensible Business Reporting Language (XBRL). The session featured:

  • John Turner, CEO, XBRL International
  • Mike Willis, assistant director, Division of Economic and Risk Analysis, U.S. Securities and Exchange Commission (SEC)
  • Alex Fisher, senior accountant, Ontario Securities Commission
  • Wasim Thaha, co-founder and director, Newsfile Corp.

Today’s digital age presents opportunities that were previously unimaginable. This is especially true for the global capital markets where investors have greater access to a wealth of information. They refuse to wait for information to be distributed to them. They want to search and analyze it whenever and wherever they want. They are becoming increasingly accustomed to personalized reporting, 24/7 availability, global consistency, large datasets and zero errors.

According to the 2016 Measuring the Information Society Report, 47 per cent of the world’s population use the Internet and this number is only anticipated to grow.

Companies, too, have a greater flexibility in how they choose to disclose information to their users, who expect this information will be available on a more frequent, timely and less costly basis.

It’s clear that in this evolving and increasingly digital environment, the traditional approach to corporate reporting must change to address the needs of its ever-growing audience.

View video of the CPA Canada – XBRL Canada information session.

Mike Willis making a presentation about corporate reporting

XBRL: using technology to enhance reporting

This is where innovative technology such as XBRL can be useful.

XBRL is a freely available and open international standard for exchanging business information. Often termed “bar codes for reporting,” XBRL can simplify the way businesses use, share, analyze and add value to the data. It also provides a foundation for more accurate and efficient reporting, and enhances the delivery and usability of financial reports.

The XBRL standard also provides for Inline XBRL reporting (iXBRL), which is an open standard that enables a single document to provide both human-readable and structured, machine-readable data.

To date, more than 60 countries and 100 regulators have mandated XBRL for part or all of their compliance reporting. In the United Kingdom, two million-plus companies file accounts and tax returns in XBRL, and both the Companies House (UK’s business register) and the SEC are publishing their structured XBRL reports free of charge for investors and the public to download for their own use.

The European Securities and Market Authority has mandated iXBRL as the European Single Electronic Format that all European companies, both public and private, must use to file annual financial reports starting January 1, 2020.

John Turner making presentation on standards in reporting

Using XBRL: mandated for Canadian foreign private issuers

Since June 15, 2011, the SEC has required all US GAAP prepared quarterly and annual financial statements to be submitted using XBRL. For periods ending after December 15, 2017, Canadian Foreign Private Issuers (FPIs) who prepare financial statements in accordance with IFRS will have to do the same.

This has significant impact for the approximately 300 Canadian FPIs that make up the SEC’s largest number of FPI filers.

Get more information to prepare for your filings in line with the SEC's mandate.

What does this mean for CPAs?

Broadly speaking, be ready to adapt to changing practices, procedures, and processes in an increasingly integrated and technology driven world.

View reporting as an opportunity to drive greater transparency and consistency, and consider using technology such as XBRL as the enabler. In other words, look at writing financial reports with two stakeholders in mind: humans and machines.

View this XBRL panel presentation to enhance your knowledge of the benefits and challenges associated with delivering structured financial data.