Who will benefit from using XBRL in Malaysia?
In 2018, the Companies Commission of Malaysia, or the Suruhanjaya Syarikat Malaysia (SSM) decided to introduce the Malaysian Business Reporting System (MBRS) and use XBRL for filing annual financial statements. The importance of XBRL is not just for the IT department but extends to every party relevant in preparing and using the report. It is believed that once XBRL is fully understood and rightly implemented, it will make the business information more meaningful to its stakeholders. This is why organizations and users must adopt and accept the concept of XBRL.
Major Beneficiaries of XBRL Reporting:
Compared to the traditional method of preparing reports using excel sheets, XBRL is better due to the transparency and the scope of comparison and analysis that it offers to investors. It is also a move towards digitization, better use of time and an efficient tool as opposed to the manual method which is expensive, time-consuming, and with a high margin of error. Every category of stakeholder can benefit from XBRL to make important decisions. The stakeholders are the corporates, the regulatory authorities, analysts, investors and auditors.
With XBRL, the systematic and orderly way of maintaining data helps in analysing and processing information. Automated data collection saves time and cost and allows internal sharing of reports. Unlike the manual paper-based method, clerical errors and repetition in the reports are reduced.
The regulatory authorities
The tagging system of XBRL will standardize the information and bring consistency in the compliance reporting of companies. The report will also be more reliable and accurate since a common XBRL taxonomy will be used, eliminating terminology issues. The transparency that XBRL brings about will improve the reporting environment of the entire country and build a base for a common international reporting standard across Malaysia. The data is available quickly and with high accuracy, which helps in timely decision-making.
The analysts, investors, and auditors
The new method of reporting paves the way for new auditing methods, which are more efficient and accurate. Automated auditing incurs less time and cost for the auditors.
Investors and financial analysts have always found it challenging to analyse paper-based reports. But XBRL makes the task very easy for them as the reports are web-based, can be compared internally at their convenience, and allows the users to focus on making the right decisions rather than on re-entering financial information from one form to another.
To conclude, the Malaysian Business Reporting System (MBRS), based on XBRL, is here to streamline the reporting process, increase transparency, improve the quality of financial information and ensure compliance. The people using this technology as well as the stakeholders of the company can benefit if it is fully understood and incorporated into the corporate system in the right manner.
Experts from DataTracks can help you leverage the most out of this new regulatory reporting system. With over 14 years in the XBRL industry and experience in preparing over 170,000 compliance reports, you can be sure that you are in the right hands. Request more information by getting in touch at firstname.lastname@example.org.