BLOG:  Digital Financial Reporting

This is a blog for information relating to digital financial reporting.  It is for innovators and early adopters who are ushering in a new era of digital financial reporting.

Much of the information contained in this blog is summarized, condensed, better organized and articulated in my book XBRL for Dummies and in the three documents on this digital financial reporting page.

Understanding How XBRL Works Using Excel

I created a video, How XBRL Works, which seems to be pretty popular for people who want to understand how XBRL works.  (The video has over 50,000 views; about 463 views per month.)

But while I explain how it works, you don't actually get your hands dirty and use XBRL, seeing for yourself how it actually works.

Well, here is something else that helps you understand how XBRL works using Excel.  The link is to a ZIP archive which contains an Excel spreadsheet.  The spreadsheet has some very straight forward macros.  What the macros do is extract information from the XBRL-based 10-Ks of 464 public companies that use interest-based revenues to report their financial information (i.e. banks).

To run the VBA code in the spreadsheet, all you need to do is click the one button in the upper left hand corner of the spreadsheet.  You do need to have Microsoft Internet Explorer installed on your computer, the VBA code uses the Microsoft XML parser to extract information from the XBRL-based reports.

There is a great deal one can learn from reverse-engineering the VBA code.  Also, if you notice the results of the information extracted and you ask yourself, "Why do some financial reports contain errors and others do not contain errors," you can learn even more.

If you are a CPA that understands how to write Excel VBA and you want to learn more about XBRL contact me.  I am always looking for people to collaborate with to create interesting software. Experimentation is a great way to get ready for the digital age of accounting, reporting, and auditing.


Posted on Friday, July 21, 2017 at 09:08AM by Registered CommenterCharlie | CommentsPost a Comment | EmailEmail | PrintPrint

Updated Conceptual Model of an XBRL-based Digital Financial Report

I have updated my description of the high-level conceptual model of an XBRL-based digital financial report.  You can get this updated information here, Introduction to Conceptual Model of a Digital Financial Report.

Why should you care about understanding this high-level conceptual model?  Anyone can create something that is complicated.  It takes hard work to create something that is simple.  The conceptual model makes things simpler.

If this higher-level conceptual model is implemented in software applications, it makes it possible to make software far more approachable by business professionals.  Not using some high-level conceptual model leads to hard to use software, less functional software, and less elegant software.

You don't have to use my conceptual model: if you don't like mine, create your own.

Ready for more detail?  Read PART 2 of Intelligent XBRL-based Digital Financial Reporting.  Really want to start getting your hands dirty? Here is the next layer of the conceptual model.

Why should you even care?  Because accounting, reporting, and auditing are going digital.

Posted on Thursday, July 20, 2017 at 03:53PM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

Getting Ready for the Digital Age of Accounting, Reporting and Auditing

Current information published by the AICPA and Journal of Accountancy tell professional accountants to "be ready" because "technology is poised to transform the accounting profession" and that "the professional will emerge in a different form".  But there is little information provided as to exactly how to be ready.  What additional skills do professional accountants need to remain relevant?

In the document, Getting Ready for the Digital Age of Accounting, Reporting and Auditing: a Guide for Professional Accountants, I endeavor to provide that information.

While the resources referenced at the end of the document are not perfect; they are the best resources that exist that I have personally seen.  If you are aware of something better, please let me know.  Really.  I want to know.

The information I have put together, while not perfect, is the best summary, synthesis, organization, instantiation that I have come up with to date.  While the referenced resources contain redundant information (because I have not figured out the best organization of the pieces yet); the information set is complete.

If you want to be on one of the early boats to digital financial reporting, that information will help you understand what you have to learn and why you have to learn it.


Posted on Saturday, July 15, 2017 at 08:36AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

AICPA News Update: Technologies are poised to reshape the accounting landscape

I am a member of the American Institute of Certified Public Accountants (AICPA). The AICPA is a professional organization of certified public accountants and has approximately 418,000 members in 143 countries currently. 

Each week or so we get an "AICPA News Update".  The update provides information on news important to the profession.

Today, this is how that AICPA News Update started of:

Technology has undoubtedly been the catalyst for change throughout history. But today, this change is happening faster than ever before. The world will look very different in a few years - and the accounting profession is no exception. Artificial intelligence, blockchain and other technologies are poised to reshape the accounting landscape, and we need to be ready.

The AICPA News Update goes on to reference a Journal of Accountancy article for the month of July 2017, Real talk about artificial intelligence and blockchain.

Interestingly, I published my own article with a similar message in late June, Accounting and Auditing in the Digital Age.  My article provides more and better details that explain the change that is about to occur and helps professional accountants understand how to "be ready" as suggested by the AICPA News Update.

About a year ago the CFA Institute made a paper available calling for broader and deeper use of structured data and stated that accountants and auditors needed additional training.

Don't make the all-to-common mistake that most professional accountants make which is to try and understand the change that is about to occur from your current perspective.  That will not work.  Most professional accountants, most business professionals really, did not receive the appropriate training in college that would enable them to get their heads around what is about to happen.

You do not need to join the "learn to code hysteria".  In fact, most professional accountants don't need to learn that much about technology, maybe a little and if you learned a lot you would have an advantage for certain tasks. Some professional accountants will need to learn more than others, but not the typical professional accountant.

My advise is to start by reading the article above, Accounting and Auditing in the Digital Age.  Stay tuned to this blog also.  While for the last 10 or so years this blog related to figuring out how to tame the XBRL beast.  Going forward, I will provide more information useful to the average professional accountant, particularly CPAs and CAs.

Posted on Friday, July 7, 2017 at 01:50PM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

JOA: Real talk about artificial intelligence and blockchain

The Journal of Accountancy, the trade magazine of certified public accountants, published the article Real talk about artificial intelligence and blockchain this month.  Here is on excerpt from that article:

"Technology is poised to transform the accounting profession. Artificial intelligence, robotics, and blockchain are on the verge of automating many traditional core CPA tasks. The profession is at a critical moment, one from which it will emerge in a far different form."

Like I have said, this stuff is going main stream.  One of the panelists sort of makes the right connection between AI and XBRL, but not that clearly.

Clearly I agree with the Journal of Accountancy.  I published a similar article a few days earlier, Accounting and Auditing in the Digital Age.  My article goes into more detail and makes the role XBRL plays in this paradigm shift more clear.  I also explain what CPAs should be doing now to stay on top of these changes.

Posted on Wednesday, July 5, 2017 at 11:15AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint