More than a year ago, players in the accounting industry began calling for financial reporting reform. The current system, they said, is broken. Instead of static reports that are filed yearly with the Securities and Exchange Commission, they want to be able to access real-time financial information via the Internet.
On Nov. 15, the SEC added a new tool to its Web site that may be a harbinger of things to come in that arena. CFO.com reports the commission's Financial Explorer is a program that allows investors and others to view the financial information of businesses that filed their reports in eXtensible Business Reporting Language, or XBRL. The tool "generates ratios, graphs, and charts to give a graphical picture of a company's performance," the story says.
Of the latest step on the road to making XBRL reporting mandatory, SEC Chairman Christopher Cox says:
In the near future, potentially millions of people will be able to analyze and compare financial statements and make better-informed investment decisions.
Some expect XBRL reporting could be required by the end of 2008.