7 Mar 03: TowerGroup Issues Report on XBRL’s Impact on Financial Reporting

TowerGroup’s Wholesale Banking practice has published new research on how the Extensible Business Reporting Language (XBRL) can help automate the collection and transfer of financial information among corporations and financial institutions, bringing greater speed and transparency to financial reporting.

The report suggests that although financial institutions have successfully deployed the Internet to provide quantum leaps in areas like productivity, customer service and cost reduction, they have not yet been able to produce similar improvements in financial reporting. At best, banks are now using the Internet only as a delivery vehicle to forward a financial report from point A to point B.

This is faster, but the report reckons it is in reality no different than sending a hard copy report through the mail. Exacerbating this continued dependence on manual intervention to collect, organize and distribute information is the growing demand for more transparency in the financial reporting process fueled by recent accounting scandals.

XBRL may help address this and other issues. TowerGroup believes.

This technology helps automate the preparation, exchange and analysis of financial information, potentially eliminating the barriers of time and space now separating those who prepare financial information from those who use it to make decisions.

TowerGroup expects the adoption of XBRL to increase significantly in 2003.