Achieving Data Transparency through XBRL
Harnessing big data is one of the biggest challenges to our competitive edge we face as a nation, and one we are excited to tackle at the upcoming Data Transparency 2013 conference. Since 2009, publicly-held companies have been mandated to disclose their financial data using eXtensible Business Reporting Language (XBRL), a standardized method of data tagging that aims to bring greater transparency, enhanced comparability and improved risk management to business decision makers and investors. But the practical applications of XBRL go far beyond the enterprise, and can even be used to bring transparency and accountability to the U.S. government.
Back in May, the House Committee on Oversight and Government Reform passed the Digital Accountability and Transparency Act (DATA Act) with unanimous support, setting the stage for a congressional vote on establishing government-wide data standards on spending. If passed, this piece of legislation will track and publish all internal and external expenditures to fight waste and fraud, creating a more efficient government that will help realize new opportunities for investment.
While this may seem like a lofty goal, adopting XBRL standardization as part of the DATA Act will create a seamless, automated solution for data collection validation and analysis, affording the easy cross-checking of financial information. Using standardized data to compare spending between agencies will allow the government to more quickly identify waste and fraud, funneling those funds to more lucrative ventures. And by making this data available to the public, it gives taxpayers a clearer picture on where and how their money is being spent. But as is the case with any new regulation, challenges arise in getting all stakeholders on the same page.
Fortunately, XBRL has been field-proven worldwide with regulatory and compliance organizations like Bank Regulators and Tax Offices. Best of all, its implementation is now easy with the right solution like the RR Donnelley’s Cloud End-to-End Solution.
How does RR Donnelley’s Cloud End-to-End Solution work? In simple terms, it takes existing application templates, such as grants, loans and contracts, and converts them into data point models. These data point models are then converted into XBRL taxonomies that can be validated and submitted online or offline using XBRL-based Web forms. The solution requires very little maintenance, is interoperable with all other XBRL taxonomies and is scalable to handle any volume of big data. Agency filers can also utilize online validation to reduce the administrative burden, and harness the cloud to allow for a fast and inexpensive development cycle that does not require XBRL expertise from governmental institutions and ensures the accuracy, consistency, correctness and completeness of the data.
RR Donnelley will be showing live demonstrations of the Cloud End-to-End Solution from Data Models to Data Analysis at the Data Transparency 2013 conference.
Actions must be taken to restore trust bring transparency and accountability back to government spending, and the DATA Act can help us reach that point. Applying a standardized system of XBRL data collection, validation and analysis across all governmental agencies will help realize those goals.