Ways Accounting Firms Can Leverage Financial Data in the XBRL Format
Preparing, reporting, exchanging, consuming, and analyzing financial statements has always been the primary goal of furnishing financial statements in the XBRL format. However, until recently, everyone talked about how businesses and stakeholders can leverage financial data in the XBRL format.
Today, with the increasing use of XBRL and evolving technologies, accountants, auditors, and accounting firms have also started leveraging XBRL financial information. Let’s see how.
- Accountants are Positioning Themselves as Business Advisors
XBRL is more than just a reporting language for financial statements; it also curates a computing infrastructure that enables accounting firms and auditors to provide consultancy and other value-added services to their clients in addition to basic reporting. This positions them as valuable and trustworthy business advisors.
- Accounting Firms are Interacting More Efficiently with Other Entities
XBRL increases accountability and transparency, as a result of which, it helps accountants interact more efficiently with other entities on behalf of their clients.
For instance, if the entity is applying for a loan, several documents and information are required to be furnished. If the financial data is in the XBRL form, accountants can help banks easily interpret that data to determine the financial position of the company.
- Accounting Firms are Easily Reviewing Clients Financial Performance
Some companies are required to get their financial statements audited, while others do it voluntarily. And furnishing financial statements in the XBRL format helps auditors analyze large amounts of financial information easily as they can review the XBRL tagged elements and determine their clients’ financial performance.
- Accountants are Offering Better Investment Options with XBRL Adoption
XBRL taxonomy contains and defines the framework regarding regulatory requirements laid down by ACRA. In fact, it is considered to be an electronic dictionary for financial terms and regulations. By analyzing this dictionary, accounting firms can make better sense of the information, help companies comply with the latest requirements of ACRA and provide better advice on investment opportunities.
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