Do accountant and auditor need XBRL for Financial Reporting Standard?
XBRL (XML Business Reporting Language) is a XML derivative for Business Reporting purpose. Equal to Chemical Markup Language (CML) an XML derivative in Chemistry field or other XML derivative. The XML trend supposed to changing the way of data communication in financial statement reporting environment, by making interconnection between application become more easier. Imagine the situation when one subsidiary company want to send the financial report to global head quarter, and find the IS auditor should perform mapping account which really time consuming
XBRL supposed to be changing the way of auditor checking the financial statement. But the problem is vary, since its quite new, most of country have decided not to make a consortium to standardize those standard. This standardization should put at the first priority, and after that the implementation at each application will also taking longer time.
In my opinion, we need XBRL when this situation happens:
1. Working with multiple ERP system
One of biggest problem when auditing big and large company with global subsidiary is when checking the consolidated account. Imagine that each subsidiary have their own accounting system. The US based subsidiary have SAP, the UK branch have JD Edwards, and the India based plant have the local develop ERP. So how consolidated account could be checked effectively if we don’t have same language -in this case XBRL.
2. Dynamically changing data transaction
XBRL offer very easy customization -following XML purpose. So if your company working in very dynamically changing data transcation then you needs to try using XBRL for testing purpose. Or if your company working in very specific industry such as research company or high technology related company
3. Non standard General Ledger Taxonomy
If you're working in non standard GL taxonomy, the you will need to -again- try the XBRL.
After all since its quite new standard, the first priority should be at making same agreement or you can say consortium to define the XBRL standard before try to experiment in this relative new XBRL.
Do you agree? For more information you can visit the official XBRL project