On February 20, 2015, U.S. SEC Investor Advocate Rick A. Fleming spoke at a Washington, DC conference regarding the need for "Effective Disclosure for the 21st Century Investor." He discussed the use of the XBRL data standard to tag public company financial statements to make it "machine-readable" and searchable for a growing computer/tech-savvy audience.
He also spotlighted efforts by the U.S. Congress to scale back the use of XBRL and hinder the public’s ability to analyze public company financial data (as referenced in the recently approved H.R. 37 by the House of Representatives that is now before the US Senate for consideration). The SEC has been slow to adapt to new technologies to streamline the listed company SEC reporting process, but Fleming feels that current efforts on the Hill will be a step back.
“To be candid, I believe the SEC has been painfully slow to adapt to changing technologies that will benefit investors,” said Fleming. “However, today I am even more troubled by Congressional action that may thwart the recent progress the Commission has been making.”
Fleming feels that if the legislation is signed into law, the SEC’s ability to modernize corporate disclosure will be impeded. He adds, "If action is needed, it should be used to press the SEC to move forward in its efforts to make disclosure more accessible and useful for investors."
He goes on to talk about the needs of next generation investors and giving the proper tools and technologies to gather and analyze large volumes of company information quickly and easily.
Added Fleming, “What we can’t afford to do is go backward. We should not expect the next generation of American investors to scroll through hundreds pages of disclosure to find the information they need to make investment decisions. Private companies would not display critical information to their customers in this manner, and American investors have a right to expect their government to do better.’
I couldn’t agree more. Investors and stakeholders need to access information in real-time and in a reliable computer readable format. Information technology like XBRL makes this possible.
What are your thoughts on this issue?
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