I created a video which walks you through seven myths about XBRL-based public company financial report quality issues. This PDF has all the screen shots from the video. The following is a list of those seven myths with links and other helpful information:
- Myth #1: Extensions are the cause of all quality problems. While extending some concepts such as "us-gaap:Revenes" does cause quality problems, generally extensions are a good thing because they enable more detailed information to be made available by public companies. (This is the link in the video to extensions which properly provide additional detailed information; go look at the revenues concepts on the income statement.)
- Myth #2: Quality of XBRL-based financial reports is hard to measure. Quality is actually very easy to measure, see here. Contrast Google, Microsoft, and AT&T in terms of quality.
- Myth #3: Financial reports are random. See this set of reporting styles which public companies fit into. See this blog post which explains combarability issues.
- Myth #4: All reported financial information is subjective. See this discussion about arbitrary and standard. See this discussion about subjective/objective.
- Myth #5: Only action by the SEC can cause quality improvement. See the improvement in the minumum criteria measures here. The SEC is applying some limited pressure, see here.
- Myth #6: Public companies don’t care about the quality of their XBRL-based information. See this blog post which shows increasing quality.
- Myth #7: Public companies won’t correct their XBRL-based financial reports. See here how Boeing fixed their financial report. You can read more about that here.
One excellent example of digital financial reporting executed well is Google. Per my minimum critiera meaurements, which includes the fundamental accounting concept relations measurements; Google has never had an inconsistency and reported information is machine-readable.