Via Twitter. Link to full article
Essentially, IRIS did a survey on the financials of 1500 Indian public companies. Discrepancies appeared in over 200 of them; figure differences as opposed to accounting interpretations.
One of the outcomes of the survey was to highlight the effect that XBRL will have in bringing such problems to light, and ultimately, to bring them in line.
In more XBRL-as-Superman news, UBMatrix has a paper on how XBRL will help track TARP spending.
A few minutes ago the announcement was made that Pravin Gordhan, current Commissioner for SARS, has been handed the position of Finance Minister. Current minister, Trevor Manuel, moves on to run a new economic planning commission.
Pravin Gordhan
Gordhan has spoken at XBRL events in South Africa, and believes the standard will be an accepted mode of business reporting. He has approved XBRL activity at SARS, and may lead with accepting corporate tax returns.
Extensible Business Reporting has undoubtably got the kinetic energy to become a political football. XBRL seems to have been nurtured by outgoing US SEC chairman Cox, but owing to the fiascos that happened on his watch, it made sense that new chairman Shapiro would distance herself from it, saying it was not a priority.
What this will mean for XBRL adoption in South Africa is going to be a question as big in these parts as the endless waiting for last year’s SEC mandate.
Two codes of corporate governance have ruled informed public companies in the last 15 years in South Africa – the King codes.
The third code was launched in Johannesburg last week for public review – you can view it here.
Some interesting points:
I must observe with unjaundiced eye that South African companies, notably the blue-chips, do adhere to the King recommendations. As it is a widely used benchmark, it is expected to come across in the company’s annual report. No self-respecting company secretary could pretend not to know about King and the recommendations.
It seems some of the proposals in the draft review are to be found between what is happening in the developed world and the new South African Companies Act, also fermenting in legal and regulatory circles.
We are all analysts. We have all the information at our disposal and we will marry that to our experiences and opinions. We don’t have faith in the established financial, political, consumer and even sporting analys systems because they’ve proven fallible. Which is ok, but not when you’re taking a fee.
We’re in a world where:
XBRLSpy: XBRL: An attempt to empower amateur analysts?
Dianne takes the view that the XBRL ruling in the US may mean many things, but it was not created to empower amateur analysts. That may be a by-product, but the millions of dollars pumped into XBRL had more upstream application.
Monkchips: Software ecosystems and convergence
James is an industry analyst for IT issues and Environmental issues – therefore you get a multisided take on both. Redmonk use the web natively, and are therefore specialists across a broad spectrum (no sic).
IR Web Report: Time to open up your earnings calls to bloggers
Dominic points out that Barack Obama called on a blogger for questions in his briefing. Research has also shown that blogs have become influential, and in many case, are as good a source for stock picking as the traditional sources. Companies should open up their calls to influential bloggers.
Re:The Auditors: Who Guards the Guardians?
Francine covers the big four accounting firms, and doesn’t let them get away with anything. Extremely influential.
Alacra: A list of analysts
This list is of analysts in many sectors – some are formal analysts from firms (Gartner, Forrester, Redmonk) and others more informal.
Remember desktop publishing? We don’t call ourselves Publishers.
Blogging? Some call themselves Bloggers, but it implies “thinker and commentator” rather than a person who simply posts. Very like a poet.
This meme came about a week after finding some serendipitous links, usually via Twitter. I’m calling it to become big – especially as it is foreseen that people are going to get very pissed off this year.
Ok, the heading is misleading and would constitute baiting if I cared enough.
Found via Dianne Mueller and sure to become an internet meme. Explaining an accounting process need not be dry when you see these cartoons (click on the image). Sure to give the Plain English versions a run for their money.
From JICPA, the Japanese Institute of Certified Public Accountants.
On a related topic, the discussion is around Twitter replacing RSS as a news feed of choice for online media types. I dramatically cut my RSS reading time and use Twitter because the idea is germinated on Twitter before it becomes a post – So Dianne tweeted about this, and then did her post.
Apart from the fact that ou can pull RSS into Twitter, expecting users to congregate around a news reader to passively consume media is actually, despite RSS and other add-ons, a very Web 1.0 concept. We ought to know better.
The King II Code of Corporate Governance, which recommends good practices for listed entities in South Africa, has always been in favour of companies having non-executive representation on the boards as well as the committees of listed companies. The reasoning behind these recommendation went as follows:
PWC brought out the Non-Executive Directors Best Practices and Fees Report which was of far more pertinence in 2009 than in any other time. Amid bailouts in developed countries and exorbitant remuneration, non-executives are either being looked to highlight problems or to shape up their own accountability. That aside, in this country a professional non-executive director is a full-time career.
As an afterthought, why do boards get ‘remunerated’ and ‘compensated’ for their time, whilst workers get ‘wages’ or a ‘salary’?
Last week the SEC formally published the XBRL mandate. While they released it in mid-December 2008, this was total ratification. Sound weird? Think of it just as Barack Obama re-taking the oath of office after some minor fluffs 
Of more interest to me is the ruling for non-US companies listed on the US markets. They file to the SEC in US GAAP, although many of them undoubtably are reporting in their countries in IFRS. The US will have to start reporting in IFRS in a few years, and therefore are open to foreing filers filing in IFRS XBRL down the line.
There seems to be confusion around this matter, so to highlight selected parts of the formal rule:
To summarise, from conversations with the SEC, they’re looking at possibly accepting IFRS (the official IASB version) in the third year (2011). Filing in IFRS to EDGAR is likely to happen before that, but as we know, EDGAR will probably not last long after June 2012.
The maritime Automatic Identification System (AIS) means that every seagoing vessel over 300 tons is required to transmit certain data every few seconds, including:
Then every six minutes “static” information is transmitted:
Bear with me: the data gets written to a database and pulled out, probably as xml because the structure of the data is similar to the element/attribute/schema nature of xml. As we know, that’s all you need to start displaying that data in exciting ways. The result is a web-viewable mashup of all these vessels around the globe.
Like GPS, the information is largely open and available to the general public. Like financial information of funds, government and public companies should be?
There have been concerns raised about XBRL having most of the specifications being tied down, but no software implementors to bring the solutions to market. While the tagging software is quite mature, there is a dearth of meaningful and fast analytical or comparison applications.
I still maintain that once the graduates of Web 2.0 find little appetite in the market for social media gadgets, they’ll turn their attention to Enterprise 2.0 applications. These excellent marine shipping examples put the implementation aspect of XBRL to shame.
It’s here: the mandate for XBRL to become an official filing process, alongside EDGAR, for listed companies in the US.
The SEC announced this in a long-awaited roundtable today, 17 December 2008. The IDEA system was launched today too. This has followed on the completion of the US GAAP taxonomies.
Immediate impact:
Companies that are listed in the US (even foreign-owned) will have to begin a process of filing in XBRL in addition to current EDGAR requirements. It will not replace EDGAR at first, and will have to be placed on the company website (if it has one). Mutual funds will have to do same for risk-return summaries.
This is a phased approach, beginning with companies with a worldwide float of over US$ 5 billion and a december year -end. There will be limited liability, the same as in the voluntary filing program. If you satisfy these requirements, talk to your EDGAR vendor tomorrow.
The big picture
XBRL software vendors will see some consolidation in the market; I believe an influx of developers from the consumer-centric web 2.0 world may find that XBRL combines their aspirations of mashups and service oriented achitecture, and financial analysis apps will experience a steep innovation curve.
At the same time, SAP and other ERP vendors will escalate XBRL within their products, for internal analysis and risk management presented in visual fashions.
Foreign markets will see the world’s biggest endorsing XBRL unconditionally, and rush to complete their taxonomies.
There is likely to be too much credit given to XBRL in the early , pre-and post inauguration days: it is not a panacea, but currently it looks like the best idea going. The ultimate aim, though never stated, is 24-7 disclosure: from the General Ledger to the markets
After weeks of speculation and false starts, it became clear that this would be a political decision. The lack of oversight in Wall Street and Washington is clearly an ethical and governance issue, but it has become clear that XBRL could go a long way to allow for better analysis, rapid decisions and early warning systems. It may not be the sherriff, but it’s the sherriff’s mustang.
