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CaseWare Africa, a division of Adapt IT, is well positioned to guide the South African market towards the move to the XBRL digital reporting standard, set to come into force in 2018.
Not only has CaseWare been part of the XBRL SA working group for over a decade but has been highly involved in the Companies and Intellectual Properties Commission (CIPC) XBRL project since its inception. Most importantly, XBRL has been embedded in CaseWare’s working papers for more than 10 years already.
As XBRL adoption rate accelerates among regulators, analysts and enterprises worldwide, South African businesses are joining the discussion about what it is, what it will mean to them and what they need to do about it right now.
The CIPC has mandated XBRL digital reporting for all qualifying entities for 1 July, 2018.
XBRL stands for eXtensible Business Reporting Language. It is a global standard for exchanging business information, based on XML (eXtensible Mark-up Language), which is used to encode financial documents in a format that both humans and computers are able to read and analyse. Many countries are putting XBRL to practical use, with the numbers of implementations growing rapidly around the world.
Ross Hampton, MD of CaseWare Africa explains that companies traditionally transmit their financial information in a printed or electronic format (such as PDF). “The recipients either read the information or, if wanting to use computer assisted analysis or electronic storage, manually transfer the data from the document into their systems.
“Of course, this process is laborious, prone to error and technically challenging. When processing information from hundreds of companies, the task becomes highly impractical. Often information might be discarded in favour of expediency.
Hampton highlights the benefits of automation of the production and submission of XBRL-compliant annual financial statements (AFS’s).
“XBRL removes the need for manual input, as XBRL-enabled software can read XBRL-tagged data and import the information directly. So data can be passed between disparate computer systems with human intervention needed only in the case of exceptions. The resulting efficiency reduces the cost of communicating and maintaining financial data, while improving its usability, integrity and compliance.
“In addition, if XBRL is used as the standard, data can be retransmitted without specially transforming it to other formats required by further recipients,” notes Hampton.
He adds that, because XBRL-tagged financial reports can be read by computers, software can be used to validate them for accuracy.
“This is an enormous advantage as it makes them more reliable, compliant and auditable. Companies can tag their data at the click of a button. This can be done with little effort by both the issuer and recipients. Being XML-based, XBRL inherits various methods for searching, querying and analysing data, meaning that companies and their stakeholders will be able to analyse financials more effectively.
“A fundamental feature of XBRL is that it is fully internationalised which means documents created in one country can be viewed in another language by recipients at a different geographic location,” he says.
He highlights the fact that CaseWar’s insights have evolved from its involvement in the XBRL SA working group for so many years. “This is augmented by the fact that we have been immersed in the CIPC XBRL project since its inception.”