Question I came across on a XBRL forum:
“As I go through XBRL tagging exercises with my undergraduate AIS class this
fall, I want to do my best to convince my students that XBRL is beneficial to
the financial reporting process. Biases/proponents aside, my experiences tell
me the students are mainly looking at the simplest cost/benefit analysis they
can get. In other words, they do not want to hear my long-winded examples of
potential transparency, efficiency, and effectiveness gains. They are familiar
with the major players in the XBRL software realm (adding Oracle and SAP with
their UB Matrix add-on, Clarity, Fujitsu, etc.), but have no idea the financial
costs the public companies are incurring. Better yet, from an auditing
perspective they don’t know what the Big 4 are paying for the technology
necessary to do their AUPs. Unfortunately, my best answer to their inquiries is
that they “will have to wait until they are hired by a company or firm to find
out.” Even I think this is a copout, but I cannot find public access to hard
cost numbers. I know the cost likely depends on the size of the company/firm
and complexity of the existing system (that needs to be expanded for XBRL
capacity), but can anyone at least give me a range of cost (just of the
software, not installation and other necessary costs) for like the Oracle or SAP
add-on or even the Fujitsu tool, without compromising any proprietary
information (no names are needed so as to protect the innocent)? Any cost
information would be much appreciated by my students.”
My response:
While I believe the costs/benefits are important, accounting technology in whole is changing as we speak. The players who can afford the Oracle and SAP surely are not affected by another measly add-on to their monster accounting package, to tag the financials. Whereas the smaller “required filers” can’t afford the tens of thousands of dollars per year in maintenance fees per year to upkeep Oracle and SAP. The shift to more affordable accounting software, has allowed many more options for XBRL reporting. Some examples of this include, cloud subscriptions, MS word/excel imports, and simple tagging software. When the market becomes saturated with many comparable options, you know what happens….commodity. I don’t think we are there yet, however with the insurgence of cloud computing, it’s not far away. As more and more companies are required to file, I see an opportunity to expand my services through consulting the XBRL process along.
