The value of XBRL certification

The Value of XBRL Certification

An ITpreneurs and XBRL International Report Date: September 2013 Prepared by: May Sau, MBA, Product Marketing Manager at ITpreneurs

IT Governance and Strategy

Content The Value of Certification XBRL Certification from the Stakeholders’ Perspective Adopting XBRL Takeaways

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The Value of Certification Driven by the demand for the more accurate and efficient exchange of business information, governments, firms and other organisations are increasingly turning to eXtensible Business Reporting Language (XBRL). Fairly rapid adoption on a global scale has created a significant need for, at the very least, an understanding of the basics of XBRL. This need is projected to increase with both continued adoption and the increasing number of companies that are transitioning from outsourcing the requisite expertise to bringing XBRL filings in-house.1 This report addresses the perceived value of XBRL training from the perspective of industry stakeholders, with both anecdotal and quantitative evidence supporting the fact that the vast majority recognize the need for training for professionals and organizations alike. As the momentum behind XBRL adoption continues to increase, the issue of data quality has moved to the forefront. While software is available and should be used to verify XBRL tagged data, filers and consumers should not rely completely on software. According to Mike Schlanger, Vice President of XBRL Business Development and Strategy for Merrill Disclosure Solutions, there are still a significant number of items in an XBRL filing that cannot be checked by software.2 It is important to have knowledgeable professionals in place to optimize the reliability and accuracy of data handling. XBRL training is the first step towards having these competencies in place. A 2011 survey by XBRL International3 (XII) polled 445 XBRL professionals from different regions around the world about their view on the value of certification. The findings show that a majority felt that as companies begin to implement XBRL, it was beneficial to have in-house professionals with a basic XBRL knowledge. The benefits are driven by three factors: • The perceived value of XBRL certification from various stakeholders impacted by XBRL; • The need for trained personnel to ensure timely and accurate reporting; • The trend towards building in-house XBRL competency either to replace or augment outsourced expertise.

We hope that you find this report insightful as you plan and prepare for your organization’s transition to XBRL reporting.

1 Financial Executives International. SEC Reporting and the Impact of XBRL: 2012 Survey. Morristown: 2012. https://www.financialexecutives.org/KenticoCMS/Research/Research-Publications/publication.aspx 2 Schlanger, M. (2013, June 11). XBRL Insights: Six Critical Issues Facing Filers (Part 1 of 2). Message posted to http://merrillcompliancesolutions.wordpress.com/2013/06/11/xbrl-insights-six-critical-issues-facing-filers-part-1-of-2/ 3 XBRL International is a not-for-profit consortium of over 600 companies and agencies worldwide working together to build the XBRL language and promote and support its adoption.

XBRL XBRL is an electronic business information reporting standard that enables the preparation, storage and sharing of business and financial information in a computer-readable format. It functions by tagging individual pieces of data, allowing for interactive selection, analysis, storage (filing) and exchange.

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XBRL Certification from the Stakeholders’ Perspective Based on the survey results (refer to Appendix B), we find that XBRL training and certification is highly valued within the XBRL community. A majority of the respondents believe that there is a market need for XBRL certificates for individuals at the foundation level. The foundation level enables professionals to understand the essentials of XBRL, including the concepts of taxonomies, instance documents and the impact of XBRL in the business reporting supply chain. When asked whether they would value an employee whose XBRL knowledge was supported by an official certificate issued by the XBRL International Consortium, 70% of respondents (strongly) agreed. Additionally, 55% (strongly) agreed that they would use the possession of an XBRL certification as a criterion for the selection of employees.

Adopting XBRL XBRL is rapidly gaining acceptance around the world as a standard global framework, with some countries mandating usage and others following close behind. We believe that as adoption accelerates, building internal capabilities is one of the critical factors companies are considering when implementing XBRL. Thus, individuals with XBRL experience and capabilities will be highly valued to organizations looking to implement XBRL.

1. Companies Transitioning from Outsourcing to In-House When companies first adopted XBRL, the lack of internal knowledge and insufficient resources prompted these companies to seek external support. However, according to the Financial Executives International study report4, large accelerated filers are expected to reduce outsource tagging in 2013 by 11%, compared to the last quarter of 2012. The reasons for this shift include: • Reducing costs: It is more cost-efficient to XBRL tag in-house than outsourcing the service. • Better control: Companies will have better visibility, control and authority over the reporting processes to better meet filing deadlines and security protocols.

4 Financial Executives International. SEC Reporting and the Impact of XBRL: 2012 Survey. Morristown: 2012. https://www.financialexecutives.org/KenticoCMS/Research/Research-Publications/publication.aspx

70% of respondents either (strongly) agreed that they would value an employee with XBRL knowledge—confirmed by an official certificate issued by the XBRL International Consortium.

55% of respondents (strongly) agreed that they would use the possession of an XBRL certification as a criterion for selection of employees.

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2. Reducing Errors in XBRL Filings Although XBRL has been proven to improve the efficiency and accuracy of data exchange, tagging errors can and still do occur. “While you do not have to become expertly fluent in XBRL, you must be proficient enough to understand more than just what tag to use,’ says Mike Schlanger. ‘You also need to know how the language works, how values must be entered, how selected tables need to be structured, and much more, so you can verify that the translation accurately reflects your SEC EDGAR filing.” In our opinion, training at the foundation level will be the first step in helping to reduce the possibility of tagging errors. It is important for companies to consider XBRL training when looking to build in-house XBRL capabilities. In our opinion, training will not only help facilitate the transition, it will also enable longer-term success by ensuring that internal filing processes are efficient and effective.

Takeaways With companies expected to continue looking to build in-house XBRL teams and processes, it is clear that: 1. For organizations: Reliance on software is not sufficient to verify the accuracy of XBRL tagging—internal capabilities and skills are required to ensure filing integrity. 2. For professionals: Certification is highly valued among financial industry stakeholders, and training will help improve job performance and skill development.

Proficiency “You must be proficient enough to understand more than just which tag to use.” Mike Schlanger

Where Can I Learn More? More information on XBRL can be found on the XBRL website at www.xbrl.org

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Appendix A – Survey Questions 1. What is your position within your organization?

2. What is your organization’s primary business reporting supply chain role? 3. The XBRL standard and its global adoption reached a maturity level sufficient to establish official

certification program for individuals at foundational level. ☐ Strongly Disagree ☐ Disagree ☐ Neutral ☐ Agree ☐ Strongly Agree

4. There is a market need for XBRL Certificates for individuals at foundation level.

☐ Strongly Disagree ☐ Disagree ☐ Neutral ☐ Agree ☐ Strongly Agree

5. The XBRL standard and its global adoption reached a maturity level sufficient to establish official certification program for individuals at professional level. ☐ Strongly Disagree ☐ Disagree ☐ Neutral ☐ Agree ☐ Strongly Agree

6. There is a market need for XBRL Certificates for individuals at professional level.


7. I would value an employee with XBRL knowledge confirmed by an official certificate issued by the XBRL International Consortium. ☐ Strongly Disagree ☐ Disagree ☐ Neutral ☐ Agree ☐ Strongly Agree

8. I would use possession of an XBRL certificate as criteria for selection of employees.


9. I would consider a higher salary for an employee with official XBRL International certificate. ☐ Strongly Disagree ☐ Disagree ☐ Neutral ☐ Agree ☐ Strongly Agree

10. I think that the official XBRL certificate will be a valuable confirmation of my XBRL capabilities.


11. I think that the official XBRL certificate might help me find a better / better paid job. ☐ Strongly Disagree ☐ Disagree ☐ Neutral ☐ Agree ☐ Strongly Agree

12. I think that employers looking for internal or external reporting skills should value owners of the

official XBRL certificate. ☐ Strongly Disagree ☐ Disagree ☐ Neutral ☐ Agree ☐ Strongly Agree

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Appendix B – Survey Results

17%

49%17%

9%8%

1) The XBRL standard and its global adoption reached a maturity level sufficient to establish official certification program for individuals at foundational level.

Strongly AgreeAgreeNeutralDisagreeStrongly disagree

23%

42%

15%

11%9%

2) There is a market need for XBRL Certificates for individuals at foundation level.


18%

45%

20%

10% 7%

3) The XBRL standard and its global adoption reached a maturity level sufficient to establish official certification program for individuals at professional level.


24%

44%

14%

9%

9%

4) There is a market need for XBRL Certificates for individuals at professional level.


26%

44%

18%

6%6%

5) I would value an employee with XBRL knowledge confirmed by an official certificate issued by the XBRL International Consortium.


17%

38%27%

10%8%

6) I would use possession of an XBRL certificate as a criteria for selection of employees.


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14%

39%27%

11%9%

7) I would consider a higher salary for an employee with official XBRL International certificate.


28%

47%

14%

7%4%

8) I think that the official XBRL certificate will be a valuable confirmation of my XBRL capabilities.


19%

39%25%

10%

7%

9) I think that the official XBRL certificate might help me find a better / better paid job.


26%

44%

18%

7%5%

10) I think that employers looking for internal or external reporting skills should value owners of the official XBRL certificate.


About the Author

May Sau, MBA, is a Product Marketing Manager for ITpreneurs, a company based in The Netherlands that offers innovative competence development programs for IT best practices to support the educational needs of IT professionals. She is responsible for the marketing activities for XBRL®, TOGAF® and COBIT® frameworks. She is also co-owner of SoContent, a marketing strategy consultancy, enabling companies to better communicate their expertise to their partners.

Acknowledgements ITpreneurs is pleased to share with you a deeper knowledge of various frameworks and domains—connecting their usage and application for the betterment of the IT profession. Our appreciation goes to the industry experts who generously share their invaluable knowledge and experience with us. We would like to give special thanks to Dave Nitchman, Director of Communications and Marketing at XBRL International Inc. in writing this paper. XBRL® is a registered trademark of XBRL International Inc.

Contacts

Laurens Gunneweg Product Category Manager | ITpreneurs Tel: +31 (0)10 71 10 260 Email: [email protected] ITpreneurs www.ITpreneurs.com Weena 324-326 3012NJ Rotterdam The Netherlands

Documents

The value of XBRL certification