Demand to Surge for XBRL Experts
The U.S. Securities and Exchange Commission has proposed that companies publicly traded in the U.S. adopt a specific new technology, known as eXtensible Business Reporting Language or XBRL, for financial disclosure. The mandate issued by the SEC outlined a graduated process for adoption of XBRL, although Fortune 500 companies would be required to adopt as early as next spring. Nevertheless, a new Compliance Week survey, however, found 80% of respondents said “nobody on their staff is well-versed” in XBRL. More than half of those polled, 59%, say “they either have just begun reading up on the technology, or have done no research at all.”
New concepts like XBRL and enhanced business reporting are making real changes in the way business is being done. These major financial reporting developments are critical issues facing financial, legal, risk, audit and compliance officers at publicly held companies. Right now, corporations must add the infrastructure and strive to meet the filing requirements of the SEC. As a result, executive search firm, A.E. Feldman, reports that accounting jobs are opening up. Opportunities currently exist for Audit Managers and senior-level professionals with expertise in the preparation and maintenance of financial, accounting and statistical reports.
XBRL involves computer “tags” similar to the bar codes used to identify groceries in the supermarket. The tags uniquely identify individual items in a company’s financial statement so they can be easily searched, downloaded, reorganized, and put to any number of other comparative and analytical uses, according to the SEC. “Interactive data represents the logical next step in the evolution of company disclosure just as HTML and Internet access were the logical next step a decade ago,” says Corey Booth, SEC Chief Information Officer.
XBRL is a language for the electronic communication of business and financial data which is transforming global business reporting with the promise of greater efficiency and improved accuracy. The technology is being developed by an international non-profit consortium of approximately 450 major companies, organizations and government agencies, according to XBRL.org. Right now, implementations of XBRL are growing rapidly around the world.
Here in the U.S., the mandate issued by the SEC outlined a graduated process for adoption of XBRL. The largest organizations, those with a market capitalization in excess of $5 billion, must file their XBRL formatted financial statements for fiscal periods ending December 15th 2008. All other publicly traded companies will have to adopt XBRL by 2011. Those companies not immediately affected, however, are still being encouraged by the SEC to voluntarily adopt XBRL before it is mandated.
Despite the SEC Mandate, a Compliance Week survey shows that companies are not yet prepared for XBRL. The research reveals that a staggering 80% of the 236 publicly held companies polled lack internal expertise on the new technology. More than half, 59%, of respondents say they either have just begun reading up on the technology, or have done no research at all.
“XBRL is going to be a significant change for businesses, probably more than most realize,” says Matt Kelly, Editor of Compliance Week. “The SEC is going to mandate this technology very soon, and right now most companies aren’t showing much urgency to start preparing for it. Given that XBRL may pose some steep learning curves and technology changes that take years to digest, it’s an ominous sign that so many are so unaware.”
The majority of respondents, 79%, say their company has no XBRL expert on staff. Roughly 19% have an expert on the financial reporting team, and 2% had an expert in the IT department.
David Blaszkowsky, Director of the SEC’s Office of Interactive Disclosure, notes that the SEC has so far received over 400 interactive filings from companies participating in the voluntary XBRL filing program, reports WebCPA.
A.E. Feldman says demand for XBRL experts will grow as companies seek to meet the requirements of the SEC mandate. The proposal impacts the largest 500 companies for their 2008 year-end reports and all other public companies in the next two years. That means CIOs and CFOs who are not up to speed on XBRL will need to be soon.
A.E. Feldman’s accounting division is constantly researching industry trends and developments. To learn more about these issues or inquire about existing and future job opportunities in accounting, the lines of communication are open. Contact the firm’s accounting recruiting team here.
