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XBRL Outsource or In-Source?

February 1, 2009

How will you approach filing XBRL financial data with the SEC? Will you grind through it internally, purchase a software tool, download the appropriate XBRL taxonomies, open the financial statement file you plan to tag, setup your entity profile, mark up the data, validate your work, and export data to an Instance document? Or will choose to avoid the do-it-yourself headache and outsource the entire effort to a third party provider?

Are these the best choices you have? What about other “hidden” issues like procedures, controls, audit trails, risk mitigation and the like? After all, your XBRL Instance Document is only as good as the tags associated with your unique data.

For the first two years that you submit XBRL instance documents to the SEC, the XBRL portion of your filing will be considered “furnished” rather than “filed”. As such, your interactive data (as the SEC calls it) will not be fully subjected to security laws. After the first two years, your XBRL filings will be subject to the all the security laws your paper filings are subject to. With SEC compliance risk applied to your XBRL effort shouldn’t you be paying attention to internal controls, proper use of taxonomies and data tags?

Management of risk must be a key component of your XBRL strategy. Addressing change control, audit trails, review and approval, SOX compliance, IT controls is vital to your XBRL success. XBRL will open the window to your data in a disaggregated way. As former SEC chairman Cox said “Interactive data will let the sun shine in as never before.” Are you ready for XBRL?

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