Who’s the judge of XBRL quality?
SEC filers required to submit XBRL continue to hear that they need to focus on the quality of their tagging. They heard it from the SEC with its issuance of the Dear CFO letters last year, and they continue to hear it from data aggregators and other data consumers. Reasonably enough, filers want to know how they can assess the quality of their XBRL and their service providers.
While there are people attempting to measure XBRL quality, how reliable are their measures and assessments?
In fact, the validation rules used in these quality reports have not been developed, or widely adopted, by the major XBRL service providers. More importantly, none of these attempts to measure quality are based on the needs of investors, analysts, and other data consumers. To put it simply, the only definitive measure of XBRL data quality is usability as defined by investors, analysts, and other data consumers.
Recognizing this important need for a definitive source for XBRL data quality, Workiva partnered with XBRL US and four other service providers to form the XBRL US Center for Data Quality and the Data Quality Committee (DQC). The customers of the five service providers report over 65% of all XBRL data submitted to the SEC.
The DQC’s goal is to create a unified set of XBRL validation rules that can be freely used by all filers, service providers, and the SEC. To that end, XBRL US and Workiva have contributed their proprietary validation rules to the DQC.
To understand and address the needs of investors, analysts, and other data consumers, the DQC has seven members who represent data consumers. In addition, the DQC has regularly scheduled meetings with SEC staff to provide updates on the progress of its efforts as part of its mission to establish the definitive standard for data quality.
The DQC is releasing its proposed validation rules for public comment in phases prioritized based on those errors and inconsistencies in the XBRL data that have the greatest negative impact on the usability of the data. After public comment and final approval, the DQC will contribute its validation rules to Arelle, the XBRL platform used by the SEC and other jurisdictions worldwide to validate filings.
Data quality is of utmost importance to Workiva. Workiva will immediately adopt new validation rules approved by the DQC. This ensures that its customers have access to the most comprehensive set of XBRL validation rules.
Filers are encouraged to follow the progress of the Data Quality Committee and ensure that their service providers have access to Arelle.