The US Securities and Exchange Commission (SEC) (www.sec.gov <http://www.sec.gov/> ) adopted a rule proposal on the 16th of May that makes compulsory the use of eXtensible Business Reporting Language (XBRL) for some regulatory filings within three years (Cummings 2008). Under the proposal, the 500 largest companies will begin filing XBRL attachments with their annual reports early next year. They will be followed a year later by approximately 1 700 additional companies in 2010, while all remaining smaller companies will submit XBRL in 2011 (Jones 2008).

It might give the impression of an aggressive schedule but, according to Cummings, the SEC is only trying to catch up with other countries around the world that have already mandated the use of XBRL. Given the worldwide growth of XBRL over the past decade, the growing acceptance of IFRS and increased globalisation of business, it is inevitable that South Africa will follow. What are the opportunities and risks of an increased acceptance and implementation of XBRL amongst companies in South Africa for Chartered Accountants?

The immediate risk is to be unaware of XBRL and therefore not to foresee the risks and opportunities of an increased acceptance and implementation of XBRL. Will you, as auditor, financial accountant, consultant or manager be ready if the JSE were to follow in the footsteps of the SEC? It might be worthwhile to take note that the JSE was the first stock exchange globally to make its annual financial results available using the IFRS XBRL standard.

If you have never heard of XBRL before, or have heard about it but have absolutely no idea what it is all about, you are definitely not alone! A recent SA study showed that 55% of CAs(SA) had never heard of XBRL, 34% had heard, but did not know what it is about, and 4% understood the basic concepts, and the remaining 7% fully understand XBRL (Nel & Steenkamp 2008). Although these low levels of awareness and understanding are in line with international studies (Pinsker 2003, Grgreta 2006 & McFarland 2007), they are unacceptable in the light of the expected importance and impact of XBRL. To quote Mike Wells, partner PricewaterhouseCoopers and founding member of XBRL International: “The effect that XBRL will have on the business community will be more significant than the transition from paper and pencil analysis of financial information to the use of an electronic spreadsheet”.

On the positive side, 84% of participants in the Nel & Steenkamp study that were not aware of XBRL indicated that in the future they would investigate XBRL. The purpose of this article is to address this issue by briefly introducing the concept of XBRL to readers.


Currently, investors have to collect information from various sources and then re-import and re-format the information before it can be analysed. Forester Research Group (2001) report that workers spend 25% of time sourcing information, and companies pay workers $404 billion to find information. XBRL was conceived around a decade ago as a way to make it easier for investors to analyse the business information of public companies (Kugel 2008).

“It is clear that business exchange information and that to effectively exchange information there has to be some level of agreement on how information is exchanged. Over the years 100s of different formats have been tried with varying degrees of success. Until now there has been no standard that everyone has agreed on. However, XBRL is beginning to stand out from the pack” – Charles Hoffman, UBmatrix.


XBRL is a variant of XML (eXtensible Markup Language) that evolved from HTML. Hypertext Markup Language (HTML) is a well-known markup language that was developed to display data or text on, for example, websites. To specify the formatting of text, the text would have “tags” indicating the desired formatting, for example, <b>bold</b> would display as bold, with the tags between the <and> signs.

eXtensible Markup Language (XML) is an advanced markup language, which describes the data and says what the data is. XML is therefore metadata, not just data, but data about data. Instead of a number just being a number, XML indicates what that number is for example, a debtor figure or employee number. It therefore adds meaning to data, aiding in the efficient processing thereof by the computer software. It does this by adding “tags” to the data, again contained in <and> signs. If an employee number is formatted in the XML format, it might resemble the following: <EmployeeNo>123456</EmployeeNo>. This data is therefore identifiable by the software as not only text, but text in a specific context, e.g. an employee number.

An important part of XML is that it is “extensible”, meaning that users or companies can define their own tags. Different organisations might therefore use, define or allocate tags differently. As a result, users from different organisations cannot necessarily make use of tagged data from another organisation. In the example above of the employee number, another company may make use of the tag <EmplNo>, which would render the tag useless when used outside the specific organisation (Bagranoff, Simkin & Norman 2008:379; Dykes & Tittel 2005).

XBRL solves the abovementioned problem of inconsistency between organisations within the context of financial and business data. XBRL creates reporting protocols that standardise the tags. These tags are all included in the XBRL “taxonomy”, which is the dictionary XBRL uses to define the meaning of the different tags (XBRL International 2007b). XBRL adds a standardised tag to data indicating the nature of the data, for example “Trade debtors”. This makes the data understandable to the computer, while still being readable by humans. It can also add tags showing whether it is a monetary or other numerical item and whether it belongs in a particular grouping or classification, for example, current assets, as well as the financial period the figure relates to (Flowerday, Blundell & Von Solms 2006:326). An example of XBRL tags is available at http://www.xbrl.org/Example1/.

XBRL can also be applied to text data such as a company’s accounting policy and subcomponents. As it forms part of the XML family it can be customised to the needs of different organisations and industries. There are interest groups developing tags for specialised industries (Higgins & Harrell 2003:14). Many of these taxonomies have already been finalised in the USA, such as banking, insurance and investment management (XBRL International 2007a).

The following is an example of some XBRL terms (XBRL conference on 27 November 2007 presented in Johannesburg):


Benefits and Risks

The expected benefits and risks associated with the implementation of XBRL could be summarised as follows:


  • Eliminates the manual transfer of data, resulting in fewer errors and higher quality data.
  • Expedites real-time preparation of financial information.
  • Facilitates customised reporting and quicker analysis of data.
  • Independent of computer platform and software applications.
  • The XBRL taxonomy is both free and freely available.
  • Facilitates continuous auditing.
  • Time and cost savings arise in collecting, analysing and validating data.


  • Errors in the assignment of tags, for example, the ‘profit before tax’ tag may be assigned to ‘profit after tax’.
  • The wrong XBRL taxonomy may be used.
  • Standard XBRL taxonomies could be customised for the needs of different organisations or industries.


XBRL in Action – where can I learn more?

A good way to understand XBRL and its benefits to business is to look at how businesses use XBRL today and expects to use XBRL in the future. XBRL International has produced a number of case studies to describe how organisations have made use of XBRL. A list is available at http://www.xbrl.org/CaseStudies/.

A XBRL showcase or full project list, where project managers have provided information on how the project was managed, the issues that needed resolution, and technical details for each project are available at http://www.xbrl.org/XBRLinAction/.

Various software tools has been developed to assist in the implementation of XBRL and to enable users to use the benefits offered by XBRL. 36 different software tools are available on the official XBRL website at http://www.xbrl.org/ProductsAndServices/.

A variety of articles and demos are also available at

The way forward….An SA perspective

According to Graham Terry (Office of the Executive President – SAICA) (Terry 2008) XBRL nirvana will only materialise when all companies are required to submit all their financial information to a single central repository onto which all regulators and users of information will depend for their information needs.

Although the JSE Securities Exchange was the first stock exchange globally, as well as the first South African entity, to make its annual financial results available using the IFRS XBRL standard, acceptance and implementation of XBRL in South Africa is currently very slow. An XBRL conference was subsequently held by SAICA on 27 November 2007 to increase the awareness and understanding of CAs(SA) in South Africa (http://www.xbrl.org/za/).

Graham Terry offered the following as reasons for the current slow acceptance of XBRL in South Africa:

  • Too few people in South Africa with XBRL experience.
  • A reticence on the part of software companies to promote XBRL.
  • None of the regulators are currently enabled to receive information in an XBRL format.


Companies that do not adapt to XBRL will soon be isolated and marginalised as more and more regulators will be coming on board (currently all major South African regulators are considering implementation). For consultants and auditors various opportunities exist in becoming experts on XBRL in order to benefit from future consulting opportunities.

“Adoption of new technologies never occurs as quickly as we expect – but the impact is far greater than we realise” – Cringley’s Law

George Nel, BCom (Hons), MBA, and Len Steenkamp CA(SA), BAcc (Hons), MAcc, are both senior lecturers in the Department of Accounting at the University of Stellenbosch.



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Cummings, J. 2008. SEC Proposal: XBRL Mandatory within 3 Years. Business Finance.

http://businessfinancemag.com/article/sec-proposal-xbrl-mandatory-within-3-years-0515 Accessed 20 May 2008.

Dykes, L. & Tittel, E. 2005. XML for dummies. 4th ed. Hoboken,
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Forester Research Group. August 2001. http://www.forrester.com/ER/Research/Report/Summary/0,1338,10376,00.html. Accessed 13 May 2008.

Flowerday, S., Blundell, A.W. & Von Solms, R. 2006. Continuous auditing technologies and models: A discussion. Computers & Security. 25(5):325-331.

Grgeta, K. 2006. National survey finds nearly one-half of senior finance executives not aware of XBRL. http://www.grantthornton.com/portal/site/gtcom/menuitem.550794734a67d883a5f2ba40633841ca?vgnextoid=9d6b6123d501e010VgnVCM1000003a8314acRCRD&vgnextchannel=4695d1dec1439010VgnVCM100000308314acRCRD. Accessed 14 September 2007.

Higgins, L.N. & Harrell, H.W. 2003. XBRL: Don’t lag behind the digital information revolution. The Journal of Corporate Accounting & Finance. 14(5):13-221.

Jones, D. 2008. SEC proposes rule to make XBRL mandatory. IR Web Report. http://www.irwebreport.com/daily/2008/05/15/sec-proposes-rule-to-make-xbrl-mandatory/ Accessed: 20 May 2008.

Kugel, R. 2008. XBRL: A quick primer. Business Finance.
http://businessfinancemag.com/print/7419 Accessed 20 May 2008.

McFarland, K. 2007. http://www.grantthornton.com/portal/site/gtcom/menuitem.550794734a67d883a5f2ba40633841ca?vgnextoid=c2ce797f67e12110VgnVCM1000003a8314acRCRD&vgnextchannel=590923012cdef010VgnVCM1000003a8314acRCRD. Accessed 14 September 2007.

Nel, G.F. & Steenkamp, L.P. 2008. Meditari Accountancy Research. Volume 16, Number 1, 2008.

Pinsker, R. 2003. XBRL awareness in auditing: a sleeping giant? Managerial Auditing Journal. 18(9):732-736.

Terry, G. 2008. http://www.saica.co.za/resources/ShowItem.asp?Item=1008&ContentPageID=330 Accessed: 20 May 2008.

XBRL International. 2007a. Financial reporting taxonomies. http://www.xbrl.org/FRTaxonomies/. Accessed 6 November 2007.

XBRL International. 2007b. How XBRL works. http://www.xbrl.org/HowXBRLWorks/. Accessed 11 October 2007.A