Digital Financial Reporting

The Japanese Institute of Certified Public Accountants has published a cartoon which explains what XBRL is, explains the benefits of XBRL, and explains how it works.  The video is about 15 minutes long, in Japanese, but has English subtitles.

You can get to the cartoon here.

This video cartoon is quite clever and does a good job of explaining important ideas about XBRL and how it will be impacting financial reporting and auditing in the coming years.

Here are three quotes from the cartoon for CPAs:

The way audits are conducted my also change from paper-based verification to computer verification.

XBRL may alter the way information is disclosed and audits are conducted.

A few years from now, the job of a CPA will probably undergo dramatic change because of the availability of audits by XBRL and the assurance of XBRL data assurance, among other tools.

The list of SEC XBRL filings which has received my 5 Star Rating has now reached 92!

You can see the list of filings receiving my 5 Star Rating below and you can go to this web page to see the detail of the analysis. (Recall that last week I posted a blog entry stating that I had found 24 SEC XBRL filings to which I could assign a 5 Star Rating.)

Criteria for Receiving a 5 Star Rating

The following is a summary of the criteria for receiving my 5 Star Rating (For more details see this blog post):

1. No XML, XBRL, or EFM syntax errors. This is indicated by having a "0" in Column 8 which is marked with "E" under "Edgar Filing Manual" on the XBRL Cloud validation report.
2. Calculation consistent.  (i.e. no calculation inconsistencies reported during XBRL validation)
3. Pass one basic business rule.  One business rule must be passed, basically checking for the existence of net cash flows and the reconciliation of the beginning and ending balance of cash.
4. [Table]s must be correctly created. The [Table] structure must follow the US GAAP Taxonomy Architecture as specified.
5. Extension concepts reasonable.  The extension concepts added must appear reasonable.  This is admittedly subjective, it would take a blatant error to be dinged for this, if everything else was satisfied.

Remember that this set of criteria is just a basic set of minimal criteria which an SEC XBRL filing should, in my view, meet at this stage of the game.  There are many other things which need to be considered in order to be considered a high quality filing.  See this blog post for more information.  This blog post relates to things accountants might need to consider.

Summary of Filings Analyzed and Analysis

The SEC XBRL filings which I analyzed were 10-K's and 10-Q's submitted between January12, 2010 and March 2, 2010.  Here is summary information about that set of filings.

• There were a total of 422 filings in this set.  Of that total, 92 received a 5 Star Rating, which is 22%.
• Of the 422 filings, 401 of them (95%) had no XML, XBRL, or EFM errors reported (criteria 1). So only 21 had these types of errors.
• Of the 422 filings, 317 of them (75%) had no calculation inconsistencies. So only 105 had calculation inconsistencies.
• Of the 422 filings, 319 of them (75%) modeled [Table]s correctly.  So only 84 had [Table] modeling issues.
• Because checking the business rules and extension concepts is labor intensive, I only checked filings which passed the other three tests for these criteria.  As such, I don't have data for the how the complete set of filings did against these two criteria.

While there were many filings doing well against one of the critera above, only 92 SEC XBRL filings did well against all 5 criteria.  Kudos to those 92 SEC XBRL filers!

Browsing These Filings

You can see the list of filings above, or you can view the filings by criteria here (these work best with a big monitor):

• Focusing on Errors
• Focusing on Calculations
• Focusing on Business Rule
• Focusing on [Table]s
• Focusing on Extension Concepts
• Filer Taxonomy
• Mashup of All Information by Filer

List of 92 SEC XBRL Filings Receiving a 5 Star Rating

This is the list of the names of companies which received my 5 Star Rating: 

• AES CORP
• Aflac Incorporated
• AKAMAI TECHNOLOGIES INC
• ALCOA INC
• ALLERGAN INC
• ALTRIA GROUP, INC.
• AMEDISYS INC
• AMEREN CORP
• AMERICAN EXPRESS CO
• AMGEN INC
• ANADARKO PETROLEUM CORP
• AVON PRODUCTS INC
• BANK OF AMERICA CORP /DE/
• BARD C R INC /NJ/
• BB&T CORP
• BOEING CO
• BOSTON PROPERTIES INC
• BOSTON PROPERTIES LTD PARTNERSHIP
• BRISTOL MYERS SQUIBB CO
• BUCYRUS INTERNATIONAL INC
• C H ROBINSON WORLDWIDE INC
• CARDINAL HEALTH INC
• CISCO SYSTEMS INC
• CITRIX SYSTEMS INC
• CLIFFS NATURAL RESOURCES INC.
• CNX GAS CORP
• COGNIZANT TECHNOLOGY SOLUTIONS CORP
• CONSOL Energy Inc
• DANAHER CORP /DE/
• DAVITA INC
• DUKE ENERGY CORP
• EBAY INC
• ELECTRONIC ARTS INC.
• EMC CORP
• ENERGEN CORP
• EQUITY RESIDENTIAL
• ERP OPERATING LTD PARTNERSHIP
• EXPEDITORS INTERNATIONAL OF WASHINGTON INC
• EXXON MOBIL CORP
• FASTENAL CO
• FLIR SYSTEMS INC
• FORTUNE BRANDS INC
• GENERAL DYNAMICS CORP
• GENWORTH FINANCIAL INC
• GILEAD SCIENCES INC
• Google Inc.
• HOLOGIC INC
• HOST HOTELS & RESORTS, INC.
• HUMANA INC
• IMPERIAL OIL LTD
• Ingersoll-Rand plc
• INTERCONTINENTALEXCHANGE INC
• INTERNATIONAL PAPER CO /NEW/
• INTUITIVE SURGICAL INC
• KELLOGG CO
• KIMBERLY CLARK CORP
• KRAFT FOODS INC
• LOCKHEED MARTIN CORP
• MARSH & MCLENNAN COMPANIES, INC.
• MATTEL INC /DE/
• MCDERMOTT INTERNATIONAL INC
• MEMC ELECTRONIC MATERIALS INC
• NETFLIX INC
• NEW YORK COMMUNITY BANCORP INC
• NUCOR CORP
• OPEN TEXT CORP
• PARKER HANNIFIN CORP
• Philip Morris International Inc.
• PLAINS EXPLORATION & PRODUCTION CO
• PPG INDUSTRIES INC
• PRAXAIR INC
• PRECISION CASTPARTS CORP
• PUBLIC SERVICE ENTERPRISE GROUP INC
• QWEST COMMUNICATIONS INTERNATIONAL INC
• REGIONS FINANCIAL CORP
• RR Donnelley & Sons Co
• SCHWAB CHARLES CORP
• SIGMA ALDRICH CORP
• Spectra Energy Corp.
• SPRINT NEXTEL CORP
• STRYKER CORP
• SUNTRUST BANKS INC
• TORCHMARK CORP
• UNITED STATES STEEL CORP
• UNITEDHEALTH GROUP INC
• Unum Group
• VARIAN MEDICAL SYSTEMS INC
• WALT DISNEY CO/
• WELLPOINT, INC
• WINDSTREAM CORP
• XTO ENERGY INC
• YAHOO INC