To date, we've discovered four important issues facing SEC Filers:
The SEC's XBRL (eXtensible Business Reporting Language) mandate means that vast quantities of information, previously available only in text format, is now searchable. This information can be analysed not only by the regulator but also by analysts and investors. For details, see http://www.sec.gov/info/edgar.shtml.
As part of a multi-million dollar refurbishment of SEC systems and the focus of the current administration on enforcement, the analytical capabilities of the Commission staff are being greatly enhanced. This means that SEC staff will be able to examine anomalies across industry filings in a highly automated manner. This in turn will help the Commission identify those firms which warrant further investigation.
The analyst community is still cautious in its use of XBRL information, given that this data source is still relatively new, is entirely focused on the US and therefore does not allow comparison with foreign markets. Some firms, however, are already consuming XBRL data, which is now helping them understand not only company performance, but also the manner in which those companies are disclosing this information.
The challenge facing both the CFO's office and investor relations professionals is the closer, almost instantaneous scrutiny of their data. Regulators, analysts and investors will be paying closer attention, focusing on the quality and consistency of the filings, as well as drawing tighter comparisons with the company's peers and competitors. As a result of increasingly sophisticated SEC analysis capabilities and the looming attestation requirements on company officials, no company can afford to be complacent when it comes to reviewing and confirming the quality of their filings.
