Challenges with XBRL Compliance in Malaysia
XBRL is not yet mandated in Malaysia and is a relatively new concept for Malaysian companies. While XBRL was introduced due to its several benefits, transitioning to XBRL can be challenging. Since XBRL is soon to be mandated, it is important to understand the challenges companies can face with XBRL compliance in Malaysia. Read on to find out.
What are the Challenges in XBRL Compliance?
XBRL Filing Requires In-Depth Knowledge
Filing financial statements in XBRL format is a challenging task that requires knowledge of the filing process, such as the taxonomy, document structure of XBRL, documents required for filing, and the use of the software. Besides technical knowledge, the preparer must also have an in-depth knowledge of financial statements (which item should be classified under which head). A lack of accounting qualification or experience can hinder understanding XBRL taxonomy.
Lack of XBRL Training
Since XBRL filing is a new concept in Malaysia, lack of training is one of the major challenges in XBRL compliance. A lack of training can make XBRL filing a complex task that is difficult to understand and implement. Moreover, the time and effort required to understand XBRL and a lack of IT personnel with relevant technical knowledge can also pose challenges to XBRL compliance in Malaysia.
Process of XBRL Filing
Right from starting till the end, XBRL filing is undoubtedly a complex, time-consuming process. Preparers must file all the elements of a balance sheet, profit & loss account, and cash flow statement in XBRL format. Once all the items in the reports are tagged, they must be validated using the validation tool. Inexperience in XBRL can cause discrepancies in annual financial statements, leading to penalties and bad decision-making.
Dependency on Manual Efforts
Although most XBRL software has an inbuilt facility to export and import required information from XML files, MS Excel files, and Word files, the dependency on XBRL filers will persist. Why? Because a large part of the XBRL process is manual and not automated. Companies must perform manual entries to convert the data into XBRL format. With an increase in the use of AI and automation in the future, human dependency is expected to reduce, saving a lot of time and effort.
The Solution to XBRL Challenges? Outsource to DataTracks!
Does XBRL compliance seem like an additional burden to you? Well, you can lift this burden off your in-house team’s shoulders by outsourcing your XBRL requirements to a vendor like DataTracks. With over 18 years of experience in the field, the professionals at DataTracks have prepared 348,000+ compliance reports for 23,400+ clients. The company has an expert team of accountants that ensures the accuracy of reports and prepares annual financial statements on time, every time.
Now that Malaysia is close to the XBRL mandate, it is time to make your way toward error-free XBRL filing with DataTracks! Get in touch with an expert at +60-392-126-125 or email @ firstname.lastname@example.org to get professional assistance.