SEC Launching New Fraud Detection Software

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March 20, 2013

Financial Times recently published the article, “SEC to roll out ‘RoboCop’ against fraud.” According to the article, the SEC will be implementing new software that will spot accounting anomalies in corporate financial statements filed with the SEC and is expected to be launched by the end of this year.

This new software is the most significant development to date regarding the SEC’s use of XBRL-formatted financial data. According to Craig Lewis, who also heads the agency’s risk, strategy, and financial innovation division, the software is being developed to scan financial disclosures and analyze areas that can be manipulated by management: “When firms are choosing accounting treatments that are unusual—that’s something we would like to highlight [for SEC examiners].”

As The Center for Excellence in Accounting and Security Analysis at Columbia University stated in its recent report, “An Evaluation of the Current State of XBRL and Future of Interactive Data for Investors and Analysts”:

… the usefulness of these data to regulators and enforcement/compliance agencies is a likely and potentially desired method. That is, digital filing of regulator-required information with filer-tagging is not an unreasonable societal expectation in the 21st century.

Hundreds of companies place their trust in Wdesk External Reporting Solution to meet all their SEC reporting requirements. Providing complete document history with audit capability, Wdesk External Reporting Solution includes integrated commenting with threaded replies, blackline reports showing the differences between any two selected revisions of a document, including XBRL revisions, and advanced user permissions on a project, document, and section basis.

Read the original Financial Times article here, and contact us to schedule a demo.

Mike Starr

About the author

Mike Starr, Vice President, Governmental and Regulatory Affairs, joined the Workiva team in September 2012. Mike previously served as the SEC Chief Accountant's advisor and acted as a liaison aimed to improve the quality of accounting and auditing decisions. Prior to his work with the SEC, Mike served as Chief Operating Officer for Grant Thornton International Ltd., where he oversaw global strategy and public policy. He earned a Bachelor of Science in accounting from Oklahoma State University (OSU), and in 2010 was recognized as an OSU distinguished accounting alumnus and inducted into the School of Accounting Hall of Fame.