University of Kansas
April 26-27, 2013
Determinants of Levels of Satisfaction with SECMandated XBRL Filing Process:
A Work in Progress
Glen L. Gray
Sung Wook Yoon
California State University, Northridge
Disclaimer
 The analysis, interpretations, and views expressed in this
paper are solely those of the authors and do not necessarily
represent positions or opinions of the Financial Executives
International (FEI).
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A Brief XBRL History
 1969: Al Gore invents the Internet
 1994: Commercialization of the Internet
 1999: FASB and IASC each publish reports on financial reporting on
the Internet
 Most large companies are including financial reporting information on their Web




sites
No consistency in terms of content, format, and navigation
Probably violating financial reporting regulations! (Still true?)
Boundary problems (In or out of financials?)
Automated searches almost impossible
 October 1999: First XBRL meeting with 13 members
 December 2008: SEC required XBRL filings starting in 2009
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US SEC Mandate Summary
3 Three year phase-in
In year 2, volume & complexity increase 10X
Adoption
summary for
corporate filers
Periods ending after
June 15, 2009
Periods ending after
June 15, 2010
Periods ending after
June 15, 2011 (1)
A. Large
Year 1 – structure amounts in
financial statement tables in
detail and notes to financial
statements in 'block text'.
Roughly 300 disclosure
elements.
(~950 filings)
Year 2 - structure amounts in
financial statement tables and
individually tag each
significant accounting policy,
table within a footnote and
each quantitative amount
within a footnote. Roughly
3,000+ disclosure elements.
Same as year 2.
B. Balance of
Accelerated
Filers with public
float > $700m
(~ next 1,600
largest public
companies)
Early Adoption available.
Year 1 – structure amounts in
financial statement tables in
detail and notes to financial
statements in 'block text'.
Roughly 300 disclosure
elements.
(~5,000 filings)
Year 2 - structure amounts in
financial statement tables and
individually tag each significant
accounting policy, table within a
footnote and each quantitative
amount within a footnote.
Roughly 3,000+ disclosure
elements.
C. Balance of
~10,000 public
companies
(including FPIs
under IFRS)
Early Adoption available.
Early Adoption available.
Year 1 – structure amounts in
financial statement tables in
detail and notes to financial
statements in 'block text'.
Roughly 300 disclosure
elements. (~26,500 filings)
Accelerated
Filers
w/ public float
> $5B
(~ Fortune 500)
Limited liability provisions are
scheduled to be lifted by the
SEC after 2nd year. Companies
may desire more comfort on
processes and controls.
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Status—in the USA*
Required SEC Filers
Internal XBRL
Users
GAAP
Filers
IFRS Filers
Tax Filers
Financial Statements
to Banks
*Much more action outside the USA
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Common Adoption Alternatives
1. Regulator provided XBRL enabled excel, word, and PDF templates and Web Interface
Portal
The Regulator will provide submission options using the
Regulatory portal and via XBRL embedded word documents,
excel workbooks, and PDF templates
2. Bolt-on via Outsourcing or internal Utility
Portal
Printers and other third party service providers
provide outsourced solution for mapping the
disclosure elements on the financial statements and
note disclosures (in block text) to the Regulator
Taxonomy
3. Bolt-on via Internal Process
ERP
Report
Writer
Portal
4. Embedded Processes
ERP
Portal
PwC
XBRL can be adopted by companies at the “highest” reporting level (i.e.
consolidated) solely for purposes of complying with regulatory
requirements. However, potential XBRL process enhancement benefits are
not fully realized.
-Enables automation of currently manual assembly and review processes
-Requires companies to assess information needs and provides an opportunity to
eliminate inefficiencies in current compliance and reporting processes.
-Enables process enhancements that lead to more timely higher quality data for
decision making purposes
-Maximizes benefits of XBRL to preparers and internal users of financial and nonfinancial information.
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SEC Staff Observations
On initial submissions
 http://www.sec.gov/spotlight/xbrl/staff-review-observations.shtml
October 2009
November 2010
1. Rendering
1. Negative values
2. Element selection
2. Extending for an element where an existing US
3. Contextual references
4. Negative values and negated
labels
5. Decimals
6. Other observations
GAAP Taxonomy element is appropriate
3. Observations on Axis and Member use
4. Observation on US GAAP modeling of Axis and
Members
5. Observation on Tagging completeness —
Parenthetical Amounts
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FEI XBRL Preparedness Survey
 www.financialexecutives.org *
 Conducted by Financial Executives Research Foundation
(FERF)
 Survey closed October 4, 2011
 142 companies respond (138 unique companies)
 Tier 1: 34; Tier 2: 57; and Tier 3: 47
 55 survey questions (some w/ sub-questions)
*SEC Reporting and the Impact of XBRL: 2011 Survey
Free to FEI members; $49.95 for non-members, however…
Email: Bill Sinnett, Senior Director, Research, at
bsinnett@financialexecutives.org
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Continue with Current Process?
70%
60%
50%
40%
30%
20%
10%
0%
Tier 1
Tier 2
Tier 3
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Continue with Current Process?
If switching, what do you plan to change to?
XBRL
Filing
Status
Bringing InHouse/
Outsourcing
Software Solution
SEC Filing Status
TIER 1
Large Accelerated Filer
100%
—%
—%
TIER 2
Large Accelerated Filer
90%
5%
5%
TIER 3
Accelerated Filer
100%
—%
—%
Non-Accelerated Filer
100%
—%
—%
Smaller Reporting Company
100%
—%
—%
Undecided
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Results
Plan to Continue to Use Current Process (CONT)
Satisfied with Current
Provider (SAT)
Not Very Satisfied
Somewhat Satisfied
Very Satisfied
NO
Don't Know
YES
68.0%
24.0%
8.0%
26.5%
26.5%
46.9%
13.4%
13.4%
73.1%
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Fiat 500
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A Deeper Dive into the Data
 Dependent Variables
 Will you continue the same process going
forward?(Q33).
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A Deeper Dive into the Data
 Independent Variables (Survey)












Size: Revenue
Complexity: International Ops & # of business units
Service provider
XBRL filing bottleneck
In-house vs. outsourcing
Resources (e.g., training, FAQs, etc.)
Preparation hours
XBRL familiarity
Pencils down
Level of tagging
Delayed filing date (caused by XBRL)
Filing errors or issues
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A Deeper Dive into the Data
 Independent Variables (Outside)
 External auditor
 Audit fee/client revenue
 Non-audit fee/audit fee for client
 XBRLCloud.com
 Numbers of errors related with EDGAR Filing Manual
 Numbers of errors related with US GAAP Architecture
 % Extension tags
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Working “Hypotheses”
 H1: More complex organizations will have lower satisfaction




levels.
H2: Organizations with more complex XBRL filings will
have lower satisfaction levels.
H3: Level of satisfaction will not be different for in-house vs.
outsources preparation.
H4: Organizations with Big 4 auditors will have higher
satisfaction levels.
H5: Organizations with higher levels of using non-audit
services from their auditors will have higher satisfaction
levels.
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Working Hypotheses
 H6: Organizations with higher levels of training will have
higher satisfaction levels.
 H7: Organizations with higher errors rates will have lower
satisfaction levels.
 H8: Organizations that experience filing delays due to XBRL
will have lower satisfaction levels.
 H9: Overall process satisfaction levels will not vary by
provider.
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Results: Continue w/ Process
Will Continue
Will Not Continue
Tier 3
Tiers 1 & 2
Donnelly & “Other” choice
Irrelevant
Completely internal process (INTERNAL)
Irrelevant
Less than 80 hours
More than 80 hours
Shorter period
Longer period
Level of tagging details
Lower level of tagging
Higher level of tagging
Filling errors or issues
Less errors or issues
Greater errors or issues
XBRL Filing Status (XBRLFILER)
XBRL Providers
XBRL Creation (FOUT and INTERNAL)
Hours to review and coordinate with
outsourcing provider (OUTHOUR)
Pencils Down period (PENCIL)
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Results: Continue w/ Process
R-Square
0.4702
Max-rescaled RSquare
0.5426
Analysis of Maximum Likelihood Estimates
Parameter
Estimate
Standard
Wald
Error
Chi-Square
Pr > ChiSq
XBRLFILER
1.5070
0.6268
5.7809
0.0162
Donnelley
4.2617
1.6260
6.8694
0.0088
OtherPro
4.3320
1.9368
5.0025
0.0253
INTERNAL
2.1190
0.8950
5.6059
0.0179
OUTHOUR
-0.4934
0.2092
5.5601
0.0184
PENCIL
-0.5510
0.2759
3.9904
0.0458
TAGGING
-2.8347
0.8980
9.9657
0.0016
ERROR
-0.8811
0.5074
3.0155
0.0825
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Results: Continue w/ Process
 No big surprises regarding what variables are on the prior
table.
 Some surprises regarding what variables are not on the table.
 Big 4 vs. Non-Big 4
 Non-audit fees
 Training and resources
 Familiarity with XBRL
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Research Opportunities
 Field and case studies to look behind the numbers.
 Conduct a survey with fewer, more-focused questions to achieve a higher response rate.
 The application of various “theories” that can support (or not) the findings.
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



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Questions/Suggestions?
Thank You
glen.gray@csun.edu
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