Standards lead to best practices; standardization makes life simpler. Information Systems Audit and Control Association (ISACA), has pioneered and promoted standards and guidelines in the area of audit and controls for IT professionals. The white paper
’Leveraging XBRL for value in organizations’ (http://www.isaca.org/Knowledge-Center/Research/ResearchDeliverables/Pages/Leveraging-XBRL-for-Value-in-Organizations.aspx)
is timely and relevant from IT controls perspective. eXtensible Business Reporting Language (XBRL) is a fast growing standard for regulatory reporting. A standard that is consistent across the world. Regulations can be different and are very complex and jurisdictional.
This does not necessarily mean the reporting has to be different. XBRL brings in that element of uniformity in reporting standards. Regulatory reporting as all bankers know is very complex and regulators excel in demanding reports that have same data content
for varying contexts. XBRL brings efficiency in reporting, by packaging each data element across multiple reports with consistency, using tags. The data that is transmitted electronically is context based. Reports can be rationalized to make it simple and
manageable. Building new reports is much easier. The provider and consumer of information now rely wholly on a globally accepted taxonomy. The taxonomy is designed well enough to be scalable and allows flexibility. This in no way restricts the provider of
information from developing their own extended taxonomy in so far as the standards are followed.
The benefits of standardization (to reiterate) as we all know are many. XBRL not being proprietary can be used within an organization as well. The fact that the taxonomy is globally accepted, it logically follows that a single report will have multiple
consumers including the organization that provides it. The taxonomy framework gives the same view in multiple dimensions. XBRL helps in ensuring data integrity, efficient data management and more important provides ‘single view of truth’. All this in an
open standard that is simple to understand and implement with visible tangible benefits.
Going forward all standard business communication of an organization can also be taxonomy driven to avoid manipulation of words that mislead investors. That is a brave new world.