As we recently noted, filers should have comprehensive controls in place relating to XBRL. It's important that these controls are operating effectively—CEOs and CFOs have to certify their efficacy quarterly.
How do I start implementing controls around XBRL?
Many companies want to implement controls around XBRL, but don't know where to start. Well, it starts with a solid review process. One of the biggest challenges with XBRL is the volume of items to review. An average XBRL filing contains approximately 2,000 facts and each XBRL fact has an average of 10 items to review. So on average there are around 20,000 items needing review.
What should I review?
The first step is to make sure you are in compliance. All main financial statements, notes, and schedules should be tagged. You'll also want to ensure that you've appropriately tagged all of the required DEI information, that calculations have been applied throughout the document, and that your outline structure is appropriate.
Do I need to worry about validation?
Yes, validation is very important. Validation rules test whether or not your XBRL exhibit will be accepted by the SEC's EDGAR system. They also test compliance with certain parts of the EDGAR Filer Manual, SEC staff guidance, and best practices.
Be careful, though! Clearing validation errors doesn't ensure complete compliance—not all tests can be automated. You still need to manually review requirements that demand professional judgment.
Next up is completeness. Filers need to make sure everything in their document that needs to be tagged, is tagged. The process of ticking and tying is manual but necessary to make sure your document in HTML is exactly the same as your document in XBRL.
My document is fully tagged, but I'm worried about fact properties.
Don't worry, we've got the full list of what to review for each fact property. For every fact in your document you should check the following.
- Accuracy—the rounding of your XBRL value
- Values—verify amounts are correct, and the proper positive or negative value based on the debit or credit balance of the tag that is used
- Units—are you reporting USD, CAD, or the number of segments?
- Dates—confirm they match what is being disclosed in the HTML version and that they follow SEC rules
- Labels—remember that the labels are what render in the SEC Viewer, so make sure they match what you have in your HTML presentation.
What about calculations?
You may have heard about the SEC's recent Dear CFO letter about calculations. Even if you didn't receive this letter from the SEC, that's no assurance that your filing is correct. You should make sure that you have specified all required calculations in your statements and your footnotes.
Is that all?
Yes! Follow this guide quarterly, if not more frequently, to ensure compliance. Verifying these inspection points will give you and your CFO peace of mind that your organization is following all XBRL rules.