ANALYSIS OF XBRL AS FINANCIAL ACCOUNTING REPORTING FORMAT IMPLEMENTATION PROBLEMS AND SOLUTIONS

XBRL as financial accounting reporting format made its way into the limelight of financial reporting in the mid 2000s with companies given the option of voluntarily producing their annual reports using XBRL. XBRL stands for extensible Business Reporting Language which was developed to meet the real-time accounting information of employees, financial analysts, investors and other stakeholders more effectively and more efficiently.
It is a language used transfer business and financial data in a format that is suitable for machines to easily read. Many proponents of XBRL claim that it is a cost effective, efficient, accurate, and reliable way of handling, using and furnishing financial data. International not for profit consortium comprising of about 450 businesses, firms, government parastatal, and organizations joined forces to develop this business language from the larger family of XML (Extensible Mark-up Language).
The issue is; does XBRL as a financial reporting format significantly reduce the weaknesses of the traditional way of presenting accounting information over the internet? This article will look at some of the implementation problems of XBRL and then make recommendations.
BENEFITS OF USING XBRL
The fact that tags are used to represent individual line items in the financial statements; doing away with the standard WebPages or printable format of annual reports, makes it possible for processes to be automated thereby cutting daunting and repeated processes which saves costs while at the same time improving  security and accuracy of information processing. End users of accounting information like; financial analysts, investors, regulatory bodies and financial institutions can easily access, compare and analyze data with much increased speed and efficiency if it is in XBRL format. Preparers of accounting information (directors, through the accountants) are less exposed to human errors as things are greatly automated. The benefits of XBRL can summarily be said to encourage improved decision making of all actors that are involved in financial sectors.
SECURITY ISSUES OF XBRL
Security of information is an important issue in this world of ‘information ubiquitous’ that we now live in. Information now flies faster than the fastest lightning thereby making it a serious issue to allow for a nano-second leakage in information. This is apart from the premium associated with over simplification of information on the side of a business entity as their competitors would always have an insight on what is happening to a business. Competitors might even intercept the financial information of another company, alter its contents then resend it just to tarnish the image of the company.
Companies and users of accounting information will have to deal with numerous security issues that ranges from hackers activities to the weak link of employees. The existence of backdoor without the knowledge of the host of vital information can seriously compromise the output of information coming from the XBRL automated system.
ORGANIZATIONAL CAPACITY
The capacity of the producers and the intended users of accounting information should be seriously considered when analysing the impact of XBRL. Pertinent questions like (; do we have the expertise to ensure that security measures are taken so as to establish the integrity of the information sent over the internet? Are the intended users of the information willing to go the extra mile in ensuring that maximum use of the information is made?) should be asked ad initio.
IMPLICATIONS OF USING XBRL IN SUPPLYING AND USING FINANCIAL INFORMATION
Generally speaking, huge financial loss is the potential implication of prematurely implementing the use of electronic financial statement reporting. Though some people argued that the creation of XARL acts as a caveat to all that are involved in the dissemination and receipt of financial information via the internet, but what this class of people fail to realise is the fact it is not all the users of accounting information that are sophisticated enough to analyse and understand the implication of embedding XARL into the fabrics of XBRL. For instance, a passive investor, no matter how intelligent he or she is will have the time to look at tags attached to XBRL in the form of XARL (these tags include: auditors digital signature, assurance type, assurance date, level of trust that can be placed on a system, etc).
You will agree with me that this is a dicey situation. An investor who really wants to be assured that the electronic financial statement of the company she or he is analysing is not a spoofed statement would have to make a substantial financial investment in doing so or would be ready to suffer the consequential loss that might ensue.
On the other end of the spectrum, creators of XBRL might defeat one of the aims of coming up with the idea (which is to safe cost) if too much investment that will outweigh the benefit(s) to be derived from the information.
This article has raised some issues that call for active thinking, analysis, and re-assessment of the use of XBRL as a financial reporting measure.