Beruflich Dokumente
Kultur Dokumente
GF Nel Department of Accountancy University of Stellenbosch LP Steenkamp Department of Accountancy University of Stellenbosch
Abstract eXtensible Business Reporting Language (XBRL) is an important new technology for the electronic communication of business and financial data and, by implication, relevant to, inter alia, chartered accountants. Because research in Australia and the USA showed unacceptably low levels of awareness and understanding of XBRL, research was conducted to determine the levels of awareness and understanding of XBRL in South Africa. The study was limited to chartered accountants. The results showed that the majority of chartered accountants in South Africa are currently unaware of XBRL and few fully understand it. In spite of these findings, the majority of respondents acknowledged the fact that it was necessary for either them or someone in their organisation to investigate the matter of XBRL in the near future. Key words Chartered accountants Communication of business and financial data Information technology and accounting XBRL
standard is free of charge and anybody can make use of it. XBRL is being developed by an international consortium of companies and organisations, with international implementation taking place in increasing numbers (XBRL International 2007b). South Africa is playing its part in this process, with the launch of XBRL South Africa in July 2006. The South African Institute of Chartered Accountants (SAICA) as well as the Big Four audit firms, namely PricewaterhouseCoopers, Ernst & Young, KPMG and Deloitte, are founding members of XBRL South Africa. Prior research by, for example, Pinsker (2003) in the USA, indicated that there was a lack of awareness among potential XBRL stakeholders, in spite of the benefits of this revolutionising development and coverage in the US popular and business press. In South Africa, there has been coverage in the popular press, for example, in an article in Die Burger (Fokus op XBRL 2006), and Accountancy SA (De Beer 2006). This gives rise to the need to assess the level of awareness of XBRL among South African CAs. This study attempts to address this question. It also investigates CAs understanding and current perceptions of XBRL and whether there is a demand for further education on XBRL. The next section briefly describes XBRL, followed by a discussion of the international research literature on awareness and perceptions of XBRL. Thereafter the research methodology is set out in section 4, including a detailed description of the research questions answered by this study. The results of a survey are discussed in the penultimate section, followed by the conclusion.
2 What is XBRL?
A detailed and technical description of XBRL falls outside the scope of this research and only a brief background description of XBRL and its benefits and risks is provided.
company may make use of the tag <EmplNo>, which would render the tag useless when used outside the specific organisation (Bagranoff, Simkin & Norman 2008:379; Dykes & Tittel 2005). eXtensible Business Reporting Language (XBRL) is a variant of XML, developed specifically for business and financial reporting. XBRL solves the abovementioned problem of inconsistency between organisations in the context of financial and business data. XBRL creates reporting protocols that standardise the tags used to communicate financial and business data electronically. These tags are all included in the XBRL taxonomy, which is the dictionary XBRL uses to define the meaning of the different tags (XBRL International 2007b). XBRL adds a standardised tag to data indicating the nature of the data, for example Trade debtors. This makes the data understandable to the computer, while still being readable by humans. It can also add tags showing whether it is a monetary or other numerical item and whether it belongs in a particular grouping or classification, say, current assets, as well as the financial period the figure relates to (Flowerday, Blundell & Von Solms 2006:326). XBRL is not only applied to financial or numerical data, but also to text data. Thus the companys accounting policy and its subcomponents may also be identified by XBRL tags. Since it forms part of the XML family, it is also extensible, and can therefore be customised to suit the needs of different organisations and industries (Higgins & Harrell 2003:14). There are indeed groups working at developing specific tags for specific industries (Higgins & Harrell 2003:14), some of which have already been finalised in the USA, for example, taxonomies for banking, insurance and investment management (XBRL International 2007a).
auditing, a practice which could become more prevalent as time goes on (Troshani & Doolin 2007; Flowerday et al. 2006; Barac 2004; Higgins & Harrell 2003; Bergeron 2003).
2.4 Conclusion
The above discussion provided a brief overview of XBRL and its benefits and risks. Various resources are available, which include further background on and more technical details of XBRL, its taxonomies and elaborations on the benefits and risks of XBRL. The reader is referred to www.XBRL.org, Bergeron (2003), Dykes and Tittel (2005) and Phillips, Bahmanziari and Colvard (2008). XBRL is a beneficial addition to the information technology environment of CAs, with advantages such as cost and time savings that may be anticipated. While XBRL does not appear to hold any undue risk, auditors need to be aware of its workings and potential
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impact on the figures on which they provide an opinion. It would therefore appear that a high level of awareness should exist among CAs. The next section reviews literature on the awareness and perceptions of XBRL.
3.2 Perceptions
Pinsker and Wheeler (2007) launched a study on the perceptions of non-professional investors of XBRL. Two groups of MBA students carried out an assignment on the analysis of financial statements, with one group using XBRL-based information and technology and the other conducting the more traditional paper-based analysis. The participants perceived the XBRL-enabled analysis of financial statements to be more effective and efficient. The participants also perceived the companies that make XBRL information available to be more effective and efficient. They noted that users perceptions were positively affected when they were provided with an example of the uses of XBRL and of practical experience of XBRL. According to the respondents in Pinksters (2003) study, the benefits of XBRL of, say, effectiveness and efficiency, would occur in practice. Pinsker recommended that XBRL International should increase its efforts to make the potential benefits more widely known among the future user base of XBRL. He also placed the onus on the shoulders of auditors to educate themselves on the issue of XBRL. As discussed earlier, XBRL is extensible and can be modified. However, 66% of the respondents in the survey by the CFA Institute (2007a) felt that the ability to modify the standard taxonomy should be limited, while 25% felt that modifications should be prohibited (CFA Institute 2007b). It would seem that XBRL is currently not a well-known innovation internationally, but that there are positive perceptions of it. The current study investigates this matter in a South African context.
4 Research methodology
4.1 Contribution of the research
The research was conducted in an attempt to assess the level of awareness and understanding of XBRL among CAs registered with SAICA. As discussed in section 2, XBRL has many benefits and will in all probability have an impact on CAs, be it as auditors or as compilers or users of information. It is therefore vital for CAs to be aware of and have a working knowledge of XBRL. If these are lacking, corrective steps need to be taken. It is hoped that the results of this study will assist SAICA and XBRL South Africa to determine strategies to aid the adoption and diffusion of XBRL in South Africa. SAICAs willingness to support this research and expressed interest in the results indicate that this may indeed be the case.
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(4)
Do chartered accountants in South Africa feel there is a need for further education and information on XBRL?
maximise the number of responses and to obtain the input of as many respondents as possible, it was decided not to make use of a random sample. On 31 July 2007, SAICA sent an e-mail to 9,572 chartered accountants in commerce and industry and in medium and large audit practices in the Western Cape, on the East Rand and West Rand, and in the Johannesburg and Pretoria areas. These were the areas and sectors that SAICA and XBRL South Africa indicated to be those in which members were more likely to have a need of XBRL and would therefore be most likely to have an awareness of XBRL. It was felt that sending the questionnaire to small practitioners would skew the results, because at this stage of the development and implementation of XBRL, these small practitioners would probably have no need of XBRL and it would therefore be of little relevance to them. An additional constraint was that this study focused on CAs in South Africa and it was felt that the results might not be generalisable beyond this scope. However, it would add to the body of knowledge on XBRL in general and more specifically in South Africa. It would assist in future studies where the awareness of different countries might be assessed and compared, as was envisioned in Troshani and Doolin (2007:185).
5 Discussion of results
5.1 Response rate
The 208 responses received were fewer than would have been ideal, but the researchers decided to continue with the research and analysis of results for the following reasons: In spite of the low rate in terms of percentage coverage (2.2%), the rate in terms of absolute numbers (208) was still a sufficient basis for preliminary conclusions. This was an exploratory study and the results would therefore indicate future actions to raise awareness, regardless of the response rate achieved. Both SAICA and XBRL South Africa supported the initiative and it was therefore doubtful whether a higher response rate could have been achieved by any other costeffective means. Since XBRL is relatively new technology in terms of widespread use, this might lead to a low level of awareness. Because of this, it was anticipated at the start of the study that a non-response bias might exist with respect to potential respondents who did not know of XBRL and who would therefore not be interested in participating in the survey. This proposition was conceivably borne out by the fact that a considerable number of people (8,575) who received the e-mail did not open or read it (only 997 persons to whom the e-mail had been sent opened it). It is worth noting that the response rate of the persons opening the e-mail was 20.8%. Previous research of this type conducted by Pinsker also had an extremely low response rate, with only 17 usable responses in the sample (Pinsker 2003:734). Likewise, Troshani and Doolin (2005) based their conclusions on 11 interviews.
the respondents demographic information the respondents level of awareness of XBRL the participants appetite for further investigation on XBRL in the future because of this
survey From figures 1 and 2 it is evident that 53% of the respondents were employed in top management (managing directors, financial directors, other directors and senior management) at the time and 71% were in large organisations (listed companies, unlisted companies with an annual turnover of more than R50 million and the Big Four audit firms). This strengthens the credibility of their inputs and the results of the survey in general. Figure 1 Job description of respondents
Senior management 14% Accountants 19% Other director 8% Auditors 10% Financial director 21%
Other 13%
The respondents were requested to rate their awareness of XBRL before this survey. Since a brief description of XBRL was given in the cover letter to the questionnaire, it was necessary to set the parameter before this survey. The results are presented in table 1.
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Table 1
I have never heard of it I have heard of it, but do not know what it is about I have heard of it and am aware of XBRL
The majority of respondents (89%) had never heard of XBRL prior to the survey or had heard of it, but did not know what it was about. The majority of CAs were therefore not aware of XBRL at the time of the survey. Part 1 of the questionnaire contained a question measuring the respondents eagerness to investigate XBRL in the near future. A brief introduction to XBRL had been given in a cover letter, and this question measured the perceived importance of XBRL to respondents who might previously have been unaware of XBRL. Respondents to this question had to choose one of the following six options: No, I have already investigated it before this survey No, I am not interested No, it is not relevant to me Possibly, I was not aware of it before this survey Yes, I was not aware of it before this survey Yes, I was aware of XBRL and will investigate it further Answers were regrouped as presented in table 2 to show the difference between respondents who were and were not aware of XBRL prior to the survey. Table 2 Will you investigate XBRL in the near future because of this survey?
Will investigate further 17% 66% 83% Will not investigate further 4% 13% 17% Total 21% 79% 100%
Only 17% of the respondents indicated that they would not investigate XBRL further, compared to 84% (66%/79%) who would investigate XBRL further, even though they had not been not aware of XBRL before the survey. This clearly shows that although the respondents were generally not aware of XBRL before the survey, they perceived the concept of XBRL technology to be important to them.
5.3 Implementation, understanding and perceptions of and demand for XBRL knowledge/courses
Fifty-seven respondents completed the second part of the questionnaire, since only those respondents who had been aware of XBRL before this survey were requested to complete this section. This section consisted of 16 questions focusing on the following: implementation of XBRL at organisational level understanding of XBRL perceptions of XBRL demand for XBRL knowledge or courses
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Yes 31%
Given that the majority of respondents were in top management (as discussed in 5.2), one would have expected respondents to have known if XBRL was to be implemented at their organisations. It could therefore be argued that the 48% of do not know answers should also be interpreted as no. Only 31% were of the opinion that their organisation would implement XBRL in the near future. Only two respondents (9%) indicated that their organisation would start implementing XBRL in the next year, compared to 43% who opted for one to two years, 13% after two years and 35% who did not know.
Only 55% of respondents who were aware of XBRL had some understanding of it. If this percentage is analysed as a percentage of the respondents who completed the questionnaire,
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only 5% of respondents indicated that they fully understood what XBRL was about, and 10% understood its basic concepts. These low levels of understanding could, however, have been anticipated given the fact that at the time, XBRL had been implemented at the organisations of only three respondents and was in the process of being implemented at another three.
information. Of the 57 respondents who completed the second part of the questionnaire, 42% had gained their awareness of XBRL either from SAICA communications or Accountancy SA articles. SAICA deems XBRL to be an important topic for CAs and is making an effort to promote awareness. To this end, SAICA held an XBRL Conference in Johannesburg on 27 November 2007, which 110 persons attended.
6 Conclusion
XBRL is a significant new technology for the electronic communication of business and financial data and as such is relevant to, inter alia, chartered accountants. Following research in the USA, in which low levels of awareness of XBRL were identified (53.7% in 2006 and 59.7% in 2007) (Grgeta 2006; McFarland 2007), the objectives of this study were to research the awareness, understanding, perceptions of and demand for knowledge on XBRL of chartered accountants in South Africa. Both SAICA and XBRL South Africa supported the research, because the outcomes would benefit them in their planning of the way forward with XBRL. A questionnaire was developed and distributed to selected chartered accountants in South Africa. In line with international studies, it was found that at the time, the majority of CAs in South Africa were unaware of XBRL (research question 1). Only 11% of the respondents had heard of XBRL and knew what it was about. This was in spite of coverage in Accountancy SA and the popular press. Few respondents had a sound understanding of XBRL (research question 2) and did not know whether it would be easy to use. Only a third of the respondents thought it would have a major impact on their organisations and was therefore relevant to them. The risks related to XBRL were perceived to be low (research question 3). At the time, XBRL was implemented at the organisations of only three respondents and was in the process of being implemented at another three. Possible reasons for the low implementation rate at the time may have been the lack of understanding of XBRL in general, and the advantages of XBRL specifically, as opposed to the relatively low risks and expected ease of use of XBRL. In response to the survey, the majority of respondents indicated that they would investigate the matter of XBRL in the near future. More than half the respondents felt that they or someone else from their organisation should attend a course on XBRL in the next year (research question 4). Even though XBRL is a new technology, it will probably soon have an impact on CAs. This study shows that there is a lack of knowledge among CAs on this technology. In order to make full use of the ample benefits of XBRL and to be able to address the risks that might flow from the implementation of XBRL, it is imperative for CAs to educate themselves on this topic. This article and the conference held by SAICA in November 2007 are among the first steps in this education process.
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