« Semantic Financial Reporting | Main | Finally, Tool Useful to Accountants Verifying SEC XBRL Financial Filing »

Smart Regulation Graphic Shows the Big Picture

The Data Coalition has a great graphic which explains the pieces of what they call "Smart Regulation".

Data Coalition, Smart RegulationIn the graphic, notice the center column, the "Engine of Automation".  Excellent term.  In order for the engine of automation to work and get the benefits to both regulators and those being regulated (in the right column) you need all the stuff in the left column (vocabularies, business rules, interchange formats, identifiers).

The HL7 folks explained this as technical interoperability, semantic interoperability, and process interoperability.

Any system, yes any system, trying to make information exchange work effectively needs all these pieces.  The reason the XBRL-based data in the SEC EDGAR system is not useful is because the FASB/SEC left some of these pieces out of their system.

XBRL is only the "interchange format" or part of the "technical interoperability" piece.  XBRL provides a way of articulating the vocabulary and business rules, US GAAP is the vocabulary and business rules.  The US GAAP Taxonomy left out many of the business rules.  It is the missing business rules which causes most of the issues with the XBRL-based information in the SEC EDGAR system.

XBRL is excelling as an interchange format.  At the technical syntax level, XBRL technical syntax is inter-operable globally.  However, many systems leave out important business rules which makes the information less inter-operable at the business semantics level.

Posted on Monday, November 12, 2012 at 07:53AM by Registered CommenterCharlie in | CommentsPost a Comment

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
All HTML will be escaped. Hyperlinks will be created for URLs automatically.