Bill Seeks to Ease Financial Data Filing Process
A proposed bill, the Financial Transparency Act, could help make financial data easier to file, search and understand. Mike Starr, vice president of governmental and regulatory affairs at financial software firm Workiva, joins Federal Drive with Tom Temin to provide insight.
Tom Temin: Tell us what are the latest trends in financial data and oversight. I know that for number of years the government has required XBRL for corporate financial reporting, but what’s going on lately?
Mike Starr: In May 2014 congress passed and the president approved the data act. That requires eventually all federal governmental grantees and contractors to report to the agencies that funded them using a non-proprietary data standard, and that data standard is XBRL. That takes affect in May 2018. The treasury and OMB are currently in the process of making the changes to enable that to work.
Tom Temin: So now we have something called the financial transparency act possibly coming up, and I know that as a member of the data coalition you are pushing for this bill so what would that bill do?
Mike Starr: That bill impacts all the financial federal regulators, so the Treasury, the Fed, the SEC and five others. It requires all those agencies to collect information in a non-proprietary data format switching from documents that you cant search, so think about PDF file, to a data standard that’s searchable and accessible not just by the agencies but by the public.
Tom Temin: So this would be almost like the other half of the data act, in requiring XBRL for financial reporting to the regulatory agencies?
Mike Starr: That’s correct. The data act really addresses governmental spending, and the financial transparency act addresses those companies that can impact our economy. It requires that the agencies that regulate then collect the information in a searchable format again that would be accessible to the general public. So it brings greater accountability to government sending and the federal government’s oversight of financial institutions that can adversely impact our economy as we saw in 2008.
Tom Temin: Now is there any evidence that the standard required in the data act, which the government’s been dealing with now for a couple of years, and this new financial transparency act is the same standard of reporting that is for the government and for the private sector, and does that matter?
Mike Starr: It probably will be the same standard. Currently, the best standard for financial data is XBRL, but the act is very careful to spell out that it only requires a non-proprietary data format. The reason for that is because as you know, technology changes and sometimes changes very rapidly so what is the top standard today may not be the top standard two years from now.
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