Academic Track @ XBRL Week Frankfurt, ECBJune, 2016
Transaction, supervision and disclosure: standardizing a continuum
Ignacio Boixo [CEN workshop on XBRL, Chair]in collaboration with AECA Integrated Suite Working Group is.aeca.es/en
Agenda
Continuum: several layers of interoperability.
The role of XBRL: connecting levels.
Research agenda.
Some references
Agenda
Continuum: several layers of interoperability.
The role of XBRL: connecting levels.
Research agenda.
Some references
The idea of a continuum
Business factsBusiness facts
Business factsBusiness facts
Business facts
Firm Stakeholders
Public policy making
Decision making
The idea of a continuum
Intensive and enhanced internal and external auditing (Vasarhelyi et al., 2004).
Approaching continuous monitoring.
Enabling better…public policy making
decision making process by firm and stakeholders (Cohen, 2009).
Limits to corporate disclosure
Competitive advantage or industry concentration (Burks et al., 2015).
Personal data protection / other legal-ethical constraints.
But also…
Bad news (Miller and Skinner, 2015).
Our focus: semantic / technical barriers.
Effectiveness of targeted transparency
User-centeredFocus on needs, interests, and abilities of information users
SustainableGain in use, accuracy, and scope over time
Non-rival consumptionLess-than-optimal amounts / dissemination of information,
Information asymmetry: adverse selectionThe Market for Lemons (Akerlof 1970).
Information asymmetry: moral hazardOne party cannot observe the other party: Principal-Agent
Full disclosure. The perils and Promise of Transparency
A. Fung, M. Graham and D. Weil, 2008
Major imperfections of Real-World Information
Targeted transparency policy
Discloser’s
mandated
information
User’s
perception &
calculation
Discloser’s
perception &
calculation
User’s
actions /
behavior
Discloser's
responses /
behavior
Discloser’s
voluntary
information
User’s
perception &
calculation
Discloser’s
perception &
calculation
User’s
actions /
behavior
Discloser's
responses /
behavior
Targeted Transparency Action Cycle. A. Fung, M. Graham and D. Weil, 2008
Presentation toward Syntax
From paper-based human reading to web-based computerized analysis
Semantics
Presentation Syntax
Business factsBusiness facts
Business factsBusiness facts
Business facts
Firm
Stakeholders
Public policy making
Decision making
Departures from the continuum
Report
Reporting rule
Repository
Regulator / Supervisor
Departures from the continuum,across industries and jurisdictions
Departures from the continuum
Regulations requiring aggregated periodic reports.
Public repositories of standardized reports.
Supervisory bodies analyzing `on behalf of…´
Agenda
Continuum: several layers of interoperability.
The role of XBRL: connecting levels.
Research agenda.
Some references
XBRL, some facts we all know…?
Well known and broadly used?
Supported by regulatory bodies all over the world.
Internet, plenty of XBRL reports… ready to be used?
template-based principle-based
compulsory items
voluntary items -
+ -
-
GAAP type
Dis
clo
sure
typ
e
Source: Valentinetti, Rea (2011)
template-based
principle-based
Standard/ compulsory /
global
Proprietary / voluntary / sectorial
GAAP type
Dis
clo
sure
typ
e
non-active push
active push
Source: Valentinetti, Flores (2011)
Issuer i(t), i(t+1)
FSA
FS A
FSCompulsory items
Repositoryi(t), j(t), k(t)…i(t+1), j(t+1),
k(t+1)…
analysis
AIi(t) ≈ AIj(t)
AIs
AIi(t) ≈ AIi(t+1)
tool
AI*i(t) ≈ AI*j(t)
AI*s
Issuer i(t), i(t+1)
FSA
FS A
FSCompulsory items
Repositoryi(t), j(t), k(t)…i(t+1), j(t+1),
k(t+1)…
analysis
AIi(t) ≈ AIj(t)
AIs
AIi(t) ≈ AIi(t+1)
AI*i(t+1) ≈ AI*i(t+1)
tooltool
AI**s
AI*s AI**i(t) ≈ AI**i(t+1)
Issuer i(t), i(t+1)
FSA
FS A
FSCompulsory items
Repositoryi(t), j(t), k(t)…i(t+1), j(t+1),
k(t+1)…
analysis
AIi(t) ≈ AIj(t)
AIs
AIi(t) ≈ AIi(t+1)
FSVoluntary items
AI*i(t) ≈ AI*j(t)
AI*i(t+1) ≈ AI*i(t+1)
Issuer i(t), i(t+1)
FSA
FS A
FSCompulsory items
Repositoryi(t), j(t), k(t)…i(t+1), j(t+1),
k(t+1)…
tool
AIi(t) ≈ AIj(t)
AIs
AIi(t) ≈ AIi(t+1)
Standard taxonomy
tool
AI*i(t) ≈ AI*j(t)
AI*s
Issuer i(t), i(t+1)
FSA
FS A
FSCompulsory items
Repositoryi(t), j(t), k(t)…i(t+1), j(t+1),
k(t+1)…
tool
AIi(t) ≈ AIj(t)
AIs
AIi(t) ≈ AIi(t+1)
Standard taxonomy
AI*i(t+1) ≈ AI*i(t+1)
tooltool
AI**s
AI*s AI**i(t) ≈ AI**i(t+1)
Issuer i(t), i(t+1)
FSA
FS A
FSCompulsory items
Repositoryi(t), j(t), k(t)…i(t+1), j(t+1),
k(t+1)…
tool
AIi(t) ≈ AIj(t)
AIs
AIi(t) ≈ AIi(t+1)
FSVoluntary items
Standard taxonomy
Extended taxonomy
AI*i(t) ≈ AI*j(t)
AI*i(t+1) ≈ AI*i(t+1)
compulsory items
voluntary items
Dis
clo
sure
typ
e
Active pushNon-Active
Push
XBRL implementation
tool
tool
tooltool
tool
Agenda
Continuum: several layers of interoperability.
The role of XBRL: connecting levels.
Research agenda.
Some references
The XBRL `glue´ effect, some evidences
XBRL benefits by junctionsList of relevant junctions:
Research gap / methodological issues
XBRL benefits are partial and hardly generalizable.
In each layer it is not clear the methodological toolkit to measure success.
Research agenda – general
Properly identify the junctions towards a continuum . Are they common for all reporting ecosystems? How to avoid its drawbacks?
Identify the toolkit for each junction.
Prepare a pilot in the context of European Single Digital Market.
Toolkit
31
Junction Method
1. From Business Fact to Reports ?
2. From reports to repositories Delphi-type study
3. Repositories to stakeholders ?
4. Stakeholders to analysis ?
5. Beyond industry and region ?
Research agenda – pilot
Context (Eurofiling, where XBRL is more mature…)
Junction category (2 of the proposed typology)
Methods (interviews, interaction, consensus)
Horizon of potential answers to be linked to the European Interoperability Framework.
Timeline: next XBRL international event?
Questions?