Disclosing Financial Statements to External Vendors: Is It Vulnerable?
The Accounting and Corporate Regulatory Authority (ACRA) of Singapore mandated that companies file their financial statements in XBRL format, with effect from March 2014. While some companies prefer preparing these XBRL reports with their in-house team, others see the mandate as a compliance burden and prefer outsourcing their XBRL services to an external vendor.
Outsourcing your company’s XBRL requirements come with various benefits, such as reduced cost of hiring and training employees, streamlined process, focus on the company’s core activities, and much more.
However, some companies feel resistant to outsourcing XBRL services due to the risks involved, which include:-
- Hindrance in communication
- Language barriers
- Less control
- Security risks
- Loss of innovation
- Loss of organisational trust
However, data security is the top concern affecting the companies’ decision of outsourcing their XBRL requirements.
Preparing and filing XBRL reports require the vendors to convert the company’s financial statements from a PDF format to an XBRL format. For this purpose, the companies need to disclose their financial data to external vendors. Financial data is extremely important for the company as it involves all the necessary external, internal, and operational knowledge about a company. Disclosing this data to a service provider may give rise to security risks. Why? Because this critical data of the company can get manipulated or stolen.
So to answer the question, if disclosing financial statements to external vendors is vulnerable: Well, that depends! If you outsource your XBRL requirements to a vendor without much research and background check, the answer would be yes. However, the security risks are eliminated if you partner with a trusted vendor with a robust security management system.
All You Need Is a Trusted XBRL Vendor
While data security is crucial to any business, you can eliminate this risk by conducting a little background check of the company and assessing certain requirements. The first thing while considering outsourcing is to check the certificates your outsourcer has earned. For instance, ISO 27001 is essential to establish a security protocol and is recognised worldwide for the company’s top security measures.
Trust Your XBRL Outsourcing to a Reputable Service Provider
If you are looking for an external vendor that provides the utmost data security, DataTracks is your ideal choice. DataTracks is ISO certified, with all your financial data stored securely on Tier 4 cloud-based data centre. The company is also certified in ISO 27001:2013 for information security management. Furthermore, a dedicated privacy team monitors the performance and changes in regulations. So be rest assured because your data is safe from theft or fraud.
And not just security, DataTracks has a commendable track record of preparing 220,000 compliance reports for over 21,500 clients. So what are you waiting for? Get in touch with an XBRL professional @ +65-31-582-850 or email at enquiry@datatracks.com.sg to streamline your conversion process without any risks.