Why Is Extensible Business Reporting Language Unpopular - Essay Example

The paper "Why Is Extensible Business Reporting Language Unpopular?" is an outstanding example of an essay on finance and accounting. The XBRL was introduced in the year 1999 and has since been adopted by several companies all over the world in an attempt to bring efficiency and accountability in their accounting processes. The XBRL has turned out to be a standard of the industry in several countries, but up to now, we find that it has been met with mixed reactions worldwide. Financial reporting at various organizations or institutions are still too reliant on the manual processes. The requirements of XBRL have proved to be unpopular especially among the federal contractors that would have actually adopted it (Kannon 47). Many individuals say that XBRL is very cumbersome or burdensome and would also be a financial problem. The federal contractors have been strongly against the adoption of the XBRL reporting, in spite of it having the apparent inefficiencies.

Admittedly, we find that tagging systems for financial reporting might not be the most apparent subject for conceptual thought, but during the last decade, we have actually seen the system being employed for several unusual purposes. In theory, the XBRL tags could be adopted for use for any financial purpose that is software-based (Thompson 45). The XBRL has been in operation over the past ten years and has substantially failed to warm up to the interest of American institutions due to one major reason which is the cost. Although it is said by some experts that, with time, the system could result in up to twenty-five percent reduction in the costs of reporting, some corporations might find it very difficult in justifying the initial cost.  However, unless a corporation has a tagging process that is automated, the tagging of XBRL data takes hours of labor, thus increasing the cost that is associated with the uses of the system (Thompson 47).

It is generally agreed that some adjustments need to be done to the system so as to be able to win the hearts and interests of Americans. Basically, when a service provider says that they will have to spend anywhere between eighty and one hundred and twenty-five hours, including your time, we find that it apparently becomes costly (Thompson 47). Fundamentally, the cost comes down to software and time; that is the more the time, the more the cost, and the less efficient the software, the more the time. The production of the system should be a matter of magnitude fewer or less time consuming, which means lower cost. The raas-XBRL, which used high-tech software together with a process that is well-honed should be designed to reduce the whole cost of the production of the system (Anders & Carol 26). Nevertheless, the ROI on the system should be demonstrated, and very fast. In addition, I cannot strongly enough recommend that XBRL International, XBRL’s major proponents, XBRL US Inc and SEC work so as to communicate and develop the ROI on the system, the filter’s return on investment that substantially surpasses the impending increase in costs. Furthermore, the audit profession should also be in a position of demonstrating how it is reducing or driving down the cost that is incurred in the provision of assurance over the XBRL.