Chairman of the International Accounting Standards Board Hans Hoogervorst delivered a speech on the future of corporate reporting.
In that speech the chairman said the IASB is ready to adapt to the changing world of corporate reporting by increasing the communication effectiveness of the financial statements, facilitating electronic consumption of financial data and by promoting integrated reporting (including social responsibility reporting and environmental sustainability reporting.
Maybe it is time for professional accountants to get ready for digital financial reporting, accounting, and auditing.
In that speech, the chairman made these comments about the IFRS XBRL Taxonomy and digital financial reporting (emphasis was added):
Better formatting of the primary statements should also facilitate digital reporting. This brings me to the third element of Better Communication, which looks at the changing nature of the consumption of financial information. Increasingly, investors are using electronic means to digest financial information, often produced by data aggregators. To enhance the quality of electronically provided data, it is imperative that the IFRS Foundation continues to develop its IFRS Taxonomy.
The IFRS Taxonomy is already used by a wide variety of market participants and regulators. It is on the verge of making a new quantum leap. The US Securities and Exchange Commission has recently mandated the IFRS Taxonomy for the filing of company reports by foreign private issuers. The European Securities and Markets Authority (ESMA) is looking to do the same in Europe; a proposition that seems to be broadly supported by influential ESMA stakeholders.
I think these developments can do much to improve the accessibility of digital financial information to investors. In addition, it can contribute to improving the quality of IFRS information in the data provided by, for example, the data aggregators. In turn, once regulatory filings become digitised, this will open up a wealth of information about how IFRS Standards are used in practice. The feedback from regulatory filings might inform us, for example, on the formatting decisions we need to take in our project to improve the Primary Financial Statements.