I’m going to play devil’s advocate and challenge the XBRL reporting provider service companies by suggesting self-service will be the majority of the way the industry looks entering 2014 and beyond.
I would have said 2013, but so many companies remain confused by the plethora of choices when it comes to their XBRL mandate reporting duties. With this kind of learning curve, a good number of public companies will still rely on outsourced remedies for their XBRL for at least a short while longer, until they decide on an inhouse solution.
The complexities of the financial world are such that automation rules and individuality and any attempts to lasso the industry cannot easily be accomplished.
The recent 60 Minutes portrayal of the Lehman Bros. 2008 meltdown and the fact no one from Lehman has been held accountable for anything when representatives of the Federal Reserve and the Securities and Exchange Commission (SEC) were onsite at Lehman in the same building for most of the year leading up to its failure, clearly demonstrates that complexity.
What happens when something grows so sophisticated it cannot be charted, tracked or documented by human means?
It reveals a lack of human control for a process that has surrendered to automation sans human intervention.
XBRL as an investor tool, while valuable, is in its infancy and although changing quite rapidly, still permits all competitors a chance to deliver their reporting service offerings to potential clients.
Potential is a great word for XBRL.
The potential for XBRL remains unknown.
Potential in its every day sense signifies triumphs and abilities not yet fully realized.
What needs to happen with XBRL reporting in order for it to achieve its full potential is that it must become a “do it yourself” function entirely.
This is why the arena is still so competitive for self-provisioning systems that companies are developing and offering: there is not as yet an absolutely clear, self-provisioning, XBRL services provider market leader.
People used to employ the services of accountants almost exclusively before software allowed simple tax returns to be done on a personal computer.
Now XBRL is very much more sophisticated than a simple tax return and I’m not trying to suggest they are one and the same in terms of how software can provide a solution.
As relatively simple tax returns are done by many a layperson, the truly complicated tax returns still require assistance from certified public accountants (CPAs).
A huge swath of year-end tax processing CPAs felt the swing of the executioner’s axe once the likes of self-provisioning software like TurboTax hit the market, and became easier and better for the average person to use, with each successive year’s version.
Self-provisioning XBRL reporting services will similarly mature.
Currently there is an intense battle going on between more than a few providers new and old.
Many of the long-time industry pundits suggest a great deal of human intervention is required in order to accomplish XBRL reporting requirements for companies.
I acknowledge this may be something that is necessary now.
What will inevitably happen in the not so distant future, however, is that software will grow mature and sophisticated to the point of permitting companies to perform their XBRL reporting requirements themselves easily, and with confidence that the software error-checking and accuracy possess more than adequate integrity.
The roles of human beings in XBRL reporting will continue to diminish no matter what claims for necessary involvement to the contrary may exist for companies providing XBRL services that take that tack.
Software, not humans, remains the solution.
When software is intuitive, easy to use and accurate to the point companies no longer need to outsource their XBRL, this is when the necessity for professional accountants intervening diminishes.
Automation and software will only improve over time.
Unlike computer processing power, actual software code that permits XBRL process efficiency gains (in what our businesses must have in order to comply with SEC public company reporting requirements), will leave XBRL provider companies that insist on human intervention being necessary, in its wake.
Humans versus machines…
Which companies truly will have the right mix at the end of the day and become recognized industry leaders in XBRL reporting services?