Conference to Help Businesses Learn about New Financial Reporting Requirements
A recent decision by the Securities and Exchange Commission will change the way publicly traded companies report their finances, and a conference at The University of Iowa will help businesses make sense of those changes.
The conference, "XBRL: Perspectives on the New Financial Reporting Technology," will be hosted by the Tippie College of Business on Thursday, March 12, in the hotelVetro from 8 a.m. to noon. Admission is free, though registration is required at.
Among those participating will be Gary Kabureck, vice president and chief accounting officer of Xerox Corp.; Bob Dohrer, partner, international assurance services group, RSM McGladrey; and Hillary Sale, professor of law in the UI College of Law and an expert in corporate governance and securities law.
Sale said the new system—called Extensible Business Reporting Language, or XBRL—will be used by businesses to report their financial numbers in their quarterly and annual filings to the SEC. The commission will then use that information in a new database called IDEA that will give investors the ability to instantly search and collate information to generate reports and analysis from thousands of companies and forms. Sale said it will fundamentally change the way companies report their finances, and how those reports are used.
"It will greatly increase the transparency of a company's financial reports, and make it easier for investors and analysts to use the information," said Sale, who also served on an SEC panel that offered advice and comment about improving financial reporting methods. For instance, she said an analyst may want to compare CEO salaries at mid-sized banks across the country. With the current reporting system—known as EDGAR—the analyst would have to identify all the banks within that range, find each bank's financial filings in the EDGAR database, and look for the CEO salaries in each report. The process could take hours, if not days. With the new XBRL reporting system and IDEA database, Sale said the analyst would just have to fill in a few fields on a web site and have the information within seconds.
"It's been described as turning on a faucet and letting the information pour out," said Sale.
Last December, the SEC mandated that all publicly traded companies in the United Statesswitch to XBRL. The 500 largest public companies must make the switch in June, while other public companies are phased in over the next five years.
As a result, Gary Wicklund, an XBRL consultant and former management professor at the Tippie College of Business, expects XBRL to become a standard financial reporting system, even for privately held businesses that aren't required to make public filings.
"The SEC is moving corporate regulatory filings into the Internet age using the work we have been doing with XBRL since 2002," said Wicklund, who will moderate a panel discussion at the conference.
As XBRL becomes more prevalent, he expects more businesses will need to learn more about the system's benefits.
Contact: Tom Snee, UI News Services, 319-384-0010