We all know that bad data in means bad data out.  For that reason, since our founding, Calcbench has had an unwavering commitment to enhancing the quality of XBRL data, so much so that we’ve built it into both our platform and our processes. This way we ensure that we don’t pass any XBRL data quality problems on to our users.

As part of this dedication to data quality, we recently set out to quantify all of the errors we’ve identified and corrected in XBRL filings filed with the US Securities and Exchange Commission (SEC) over the past several years. Through this study, we examined several types of mistakes most likely to throw off an end users’ analysis, including errors in the Document and Entity Information (DEI), scale errors, and sign switches. (Please note, these are NOT the only types of errors a filer can make!)  What we found was somewhat encouraging: over time, companies seem to be getting better at catching common errors before they file. Yet, clearly a lot more can be done.  And we remain committed to providing as much feedback as possible back to corporate reporting professionals about their own filings, so they can learn from past filing errors (something we do via our complimentary Filer Portal service).

We know that XBRL data holds significant benefits, including easy access to significant amounts of valuable data.  However, our findings suggest that most XBRL filings contain errors, most of which are relatively easy to correct and may be the result of a learning curve by both filers and third parties creating the XBRL filings. Nevertheless, the prevalence of errors suggests that filers should pay more attention to their filings as these errors can expose filers to further actions from the SEC and to potential litigation from financial statement users.

You can read a more comprehensive overview of our findings in our recent report. Some of the key insights include:

  • The most frequent errors are sign switches (about 50% of filings), followed by scale errors (about 8% to 12% of filings) and DEI errors (about 3% of filings).
  • Approximately 3% of all filings have DEI errors. These errors seem to be consistent over time, and we only observe a slight decrease in recent filings.
  • The rate of scale errors is significant (up to 12% of filings in Q4 of 2012) but it is decreasing. It seems that scale errors are made by both small and large filers and appear in both the face financials and the notes to the financials.
  • Most scale errors occur in tags associated with shares. However, a significant number of scale errors are made in tags like Revenues, Net Income, and Total Assets, which are frequently consumed by users of financial data. Scale errors are relatively easy to detect and correct.
  • Sign switches do not seem to have decreased over time. About half of all filings have at least one sign switch. Sign switches seem to have been more prominent with larger filers earlier, but the smaller filers are the ones more likely to have them in later years.

To learn more about the current state of XBRL and read more of our findings, we encourage you to read our report, “What Filers Should Know about the Quality of XBRL Filings”.

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