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The XBRL mandate is here: Is IT ready?

The XBRL mandate is here: Is IT ready?

The first stage of the reporting requirement isn't tech-heavy, but IT's involvement will need to grow

IT's role in tagging is simply to assist the finance team with the software, an effort akin to helping a user figure out how to get a business card scanner to import the information into Outlook.

UTC, a large conglomerate with almost 250,000 employees, decided to do the tagging in-house when it became one of the first companies to participate in the SEC's voluntary filing program for interactive tagging three years ago. "We did it ourselves. Just a bunch of finance guys, no IT," says UTC's Stantial.

Three years ago, there were just three tools available to help with the tagging, so the self-supporting approach to tagging was a riskier prospect than it is today. Stantial's team chose Rivet Software's Dragon Tag, since its name kept popping up in searches. "At a cost of $300, if we couldn't figure it out, we could just throw it away," he says.

Today, there are plenty of software tools to help do the tagging, notes the SEC's Blaszkowsky, and it makes sense for the financial management and technology management teams to work together to discuss software options.

Although UTC has a large, first-class IT department that could have done the work, Stantial's team decided it should figure out XBRL for itself, especially since they didn't understand how to work in XML, which forms the foundation of XBRL. After all, the tagging needed financial expertise, and the accuracy of the results ultimately belonged to Stantial's group.

IT's role will increase as XBRL usage, complexity grow

The initial tagging can be done with minimal IT involvement, but at some point, IT needs to get deeply involved in XBRL efforts. For example, as the SEC XBRL requirements grow more complex over time, it will be critical to understand how the XBRL-compliant reporting software might operate with the company's existing processes and platforms. By then, the decision is no longer a simple one of buying the easiest package to use and being able to "throw it away" if it's not suitable.

In fact, Stantial points out UTC later switched to Fujitsu's XWand, which he says has stellar editing tools for making changes after the document has been converted to XBRL. Of course, the price is much higher: An XWand software license starts at $10,000.

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