One of the takeways from the recent XBRL conference in Philadelphia was expressed by Paul Penler, an executive director at Ernst & Young (as reported in Compliance Week):
As time progresses, companies need to beef up their review processes and put more resources in place.
Penler’s comment is based on the likelihood that XBRL regulatory compliance will become more complex over time and that limited liability for filings only extends for 2 years from an initial filing and expires entirely in 2014.
So who is impacted by and what is involved in the pre-filing review process?
The short answer to part one of that question is every company that files in XBRL to the S.E.C. – whether they outsource the preparation of their XBRL filing or do it in-house. Pre-filing review is required because the filer owns their filing not their external preparer.
Now this kind of pre-filing review is often done using a big old gnarly Excel spreadsheet. You know the kind I mean. One of those worksheets you could use to wallpaper your bathroom. With miles of columns and fathoms of rows to navigate and search for stuff. In this context ‘deep dive’ reviewing means taking a deep breath and diving into this spreadsheet hoping that you’ll find what you are looking for. Trouble is, most of us are not Nuno Gomes and no-one has yet invented sat-nav for spreadsheets.
But I’m not talking about that kind of deep dive. I’m talking about the kind of deep dive that requires a big oxygen tank and a really powerful headlamp to highlight both the dangers and the hidden beauty in the depths. So let’s cut to the chase: the oxygen tank is our Folio Reviewer and the headlamp is Folio Reviewer’s data filters and custom views.
Folio Reviewer takes all the documents that comprise your S.E.C. filing and lets you navigate and view them, manage multiple comment rounds, investigate the data and inspect your XBRL tags to do as thorough a review as possible. As a minimum, a deep dive review needs to help you…
- Review your XBRL tag choices (or those made for you) so you can not only be sure you’ve made the right choices but also feel comfortable that your choices are consistent with those of your industry peer group.
- Add and review comments made on your numbers or your notes through what may be multiple rounds of feedback with comments at multiple levels of detail e.g. a report line, column or individual number cell. Not just redlining stuff but keeping a full audit trail of all your comment activity.
- Approve individual sections of your filing, entire reports or the whole filing simply by checking a box.
But that’s not really the full deep dive. To really shine a spotlight on your data and find the nuances you need to be able to filter it by multiple criteria and customize what you see. You need to highlight specific data items using tools that help you to literally light up where changes have taken place or comments made. You need to respond to auditor questions and queries by quickly ripping out the specific data set they are asking and handing it to them on a platter.
That’s the depth of the Folio Reviewer, an integral benefit of our full/self service compliance packages and Crossfire Controller application. So if you are still paddling in the shallows doing a little lazy snorkelling on the surface in one of those wallpaper spreadsheets you’re just not seeing what lies in the depths.
Come over all Jacques Cousteau? Never done a deep dive before? Fear not. Why not venture into the depths right now with some hand holding from my colleague Ted Stavropoulos, who just came back from wowing the crowds with Folio Reviewer at the recent FEI conference in New York. He’s the ideal partner for your first deep dive into the murky world of pre-filing reviews. And don’t worry – for your first immersion you don’t need a wetsuit or a French accent. Just Ted and Crossfire Controller.
Tags: Folio Reviewer
