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An Evaluation of the Current State and Future of XBRL and Interactive Data for Investors and Analysts

Harris, Trevor Samuel; Morsfield, Suzanne G.

In 2009, the Securities and Exchange Commission (SEC) mandated that public companies submit portions of annual (10-K) and quarterly (10-Q) reports—in a digitized format known as eXtensible Business Reporting Language (XBRL). The goal of this type of data was to provide more relevant, timely, and reliable “interactive” data to investors and analysts. The XBRL-formatted SEC filings information is meant to allow users to manipulate and organize the financial information according to their own purposes faster, cheaper, and more easily than current alternatives. But, how useful and usable is the resulting data? The authors—early proponents of interactive data—completed a review of the state of XBRL, with a focus on its usefulness and usability for security analysis. The study found, that investors and analysts question the reliability of the data, the simplicity and stability of the underlying taxonomy and architecture, as well as the lack of user tools that add value and are easily integrated into an investor’s or analyst’s existing work flow and tools. As a result, the researchers conclude that XBRL has promised more than it has delivered to date and is at risk of becoming obsolete for use by analysts and investors. They also offer specific recommendations to filers, regulators, and the XBRL development community that may make the formatted data more useful and useable to the very investors and analysts the SEC's XBRL mandate intended to serve.

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More About This Work

Academic Units
Center for Excellence in Accounting and Security Analysis
Publisher
Columbia Business School, Center for Excellence in Accounting and Security Analysis
Published Here
May 10, 2013
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