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XBRL Reporting: Samantha Tio Wai Yin May Jeremy Yeo
XBRL Reporting: Samantha Tio Wai Yin May Jeremy Yeo
Samantha Tio
Jeremy Yeo
Brief Overview of XBRL
XBRL is a markup language, similar to XML or HTML
If the data is accessible at any time, there is greater need for it to be accurate
at all times otherwise it could prove to be misleading
High implementation cost for some companies if they do not have up-to-date
technology or web presence (Cost-Benefit Analysis)
Question 2
To what extent can financial analysts and retail investors benefit from XBRL
reporting?
Question 2
Needs of the financial analysts and retail investor:
- Transparency
- Accurate information
Question 2
Enhance transparency of the report:
- XBRL can solve the problem of reformatting and manipulating the data
retrieved from the EDGAR
- Enables users to directly extract information from EDGAR across a broad set of
companies for comparison and other analysis without direct reference to the
printed financial reports.
- XBRL uses an unique word vocabulary that allow the various accounting and
recordkeeping systems to be compared and contrast for any business analysis
- Helps to fulfill the expanded data analysis needs emanating from the differing
recordkeeping systems
Question 2
Other benefits of XBRL:
- Accurate data
- Faster data inflow and access , creating an increased probability that anomalies
in financial reporting could be discovered much earlier
- Enhanced productivity
Issues to consider:
Cannot undo fraudulent accounting
No clear guidance on auditing of the XBRL
XBRL data is computer-readable and users will not be able to visually
recognize the errors (Tagging Error)
A single inappropriate or missing tag could result in the statements
“taken as a whole” being materially misstated,
Question 3
Whisper numbers
Unofficial and unpublished forecasts reserved for favoured clients of the brokerage
(now regulated by Sarbanes-Oxley Act)
Forecasted earnings based on collective expectations of individual investors
No evidence of higher accuracy
Affects investors’ expectations and hence share price