Abstract
About ten years ago the concept of Extensible Business Reporting Language (XBRL) was conceived by Charles Hoffman, a CPA in the state of Washington, USA. Since then it has grown to become a global phenomenon. In 2009, the Securities Exchange Commission (SEC) mandated the implementation of financial statements in XBRL format. Since its implementation, XBRL benefits where to reduce cost, improve data accuracy, flexibility and increase transparency. The purpose of this paper is to give a brief history on XBRL, XBRL’s implication on auditing, and the different challenges faced when implementing XBRL.

HISTORY Charlie Hoffman is who coined the idea of Extensible Business Reporting Language (XBRL) in 1998. Brands (2013) stated that Hoffman saw the way to “how Extensible Markup Language (XML) could be used to share financial and business information in computer systems by employing standardized tags to define the information” (p 56). XBRL enables business information to be electronically shared, communicated, interpreted, and reused without human manipulation. With XBRL, users are able to tag or establish taxonomies to an individual item whether numerical or textual data. The use of tagging or taxonomy has made it easier to understand how the information is related to each other and how the information is calculated (www.xbrl.org). Based on AICPA.org, XBRL is able to provide the following benefits to its users:
• companies and other producers of financial data and business reports can automate the processes of data collection.
• streamline the preparation of business and financial reports for internal and external decision making.
• facilitate convergence of accounting standards by the ability to align financial concepts among public taxonomies.
• facilitate principle-based accounting because it reduces the need to worry about where the item is reported, but only that it is.
• drive transparency and improves the efficiency of capital markets by helping analysts and other users of financial and business information find relevant facts.
• improve the efficiency of the capital markets by reducing the cost associated with covering a company and making the market more accessible to small and mid-cap companies.
• enable the CPA profession to proactively fulfill its primary mission to protect the public interest by improving investor access to the capital markets and increasing analyst coverage of both small and large companies through a reduction in the cost associated with covering a company.
HOW IT WORKS
In order to use XBRL, one must have accounting softwares or an application installed that incorporates XBRL tagging. Below is a visual of what XBRL looks like in computer generated language.

Note. Diagram found at http://www.xbrl.org/how-xbrl-works-1.
CURRENT ASSETS
Assets Held for Sale 100,000
Construction in Progress, Current 100,000
Inventories 100,000
Other Financial Assets, Current 100,000
Hedging Instruments, Current (Asset) 100,000
Current Tax Receivables 100,000
Trade and Other Receivables, Net, Current 100,000
Prepayments, Current 100,000
Cash and Cash Equivalents 100,000
Other Assets, Current 100,000
Current Assets Total 1,000,000
Note. This diagram contains the actual information used to produce the XBRL data. Diagram found at http://www.xbrl.org/how-xbrl-works-1 The first diagram is not easily interpreted because it was created using “instance document”, which is XBRL’s format for producing financial information. Instance document is a document which contains tagged data for an individual company. On the other hand, the second diagram provides the same “instance document” in the general accounting format which is normal text.
CURRENT STATUS In 2009, the Securities Exchange Commission (SEC) mandated the implementation of financial statements in XBRL format. However, countries such as Canada, Cayman Islands, South America, China, Japan, South Korea, Singapore, India, Belgium, France, Germany, Italy, Netherlands, Spain and the United Kingdom had already implemented XBRL before the SEC’s mandate. Some countries goal for the implementation of XBRL was either for regulating, tax filing or reporting. China was the only country able to implement and use XBRL quicker than any other countries. China used “behind-the-scenes software” which translated the data into XBRL (Kernan, 2008). This method which China used allowed “no cost of compliance for reporting companies” (Kernan, 2008). On the other hand, the transition for capital market countries to use XBRL was a bit difficult due to the following reasons:
• There are a huge number of stakeholders in the financial supply chain.
• U.S. accounting standards are highly developed.
• Corporate reporting requirements are complex and industry specific and carry risk for errors (IFRS is more policy-based than industry-specific).
• U.S. companies disclose far more granular and also more contextual information than what is collected in countries that use more generic, template-based report forms, such as those used in China and Japan, and for private companies in Europe.
• The burden of compliance had to be low before the SEC could require the approximately 17,000 public companies and 8,000 mutual funds to start filing XBRL data. (Kernan, 2008)
While in the transitioning phase, these countries will still encounter obstacles along the way in regards to the full implementation of XBRL. XBRL has been known to also add benefits during the auditing process. Brands stated that XBRL can be used “to streamline business processes to help companies save time and money and improve the quality of financial reporting” (57). It was also noted that XBRL is “gaining traction and acceptance” (Brands 57). As with all things, it will take some time before XBRL is used to its full potential. Accounting majors does not possess the content knowledge needed and accountants do not possess the pedagogical knowledge. As the demand becomes greater, hopefully everyone within the accounting profession would gain the knowledge needed to use XBRL.
FUTURE
Profound changes will develop after the technology becomes more common and adoptable. The primary benefit of XBRL is real-time reporting. When more companies begin to use XBRL to report their financials, it will give accountants, financial analysts and investors a tool with distinct advantages over traditional reporting methods. Eventually, when companies get used to correctly tagging data, it will generate major cost savings and will free up plenty of time that had been spent reformatting data to upload into different mediums. Currently XBRL is just supplementing traditional financial statements, but in the future XBRL and financial reporting will be synonymous. XBRL will evolve and there will be even more uses and benefits for companies and their investors.

Works Cited
AICPA (2014). Benefits and Potential Uses of XBRL. Retrieved from http://www.aicpa.org/InterestAreas/FRC/AccountingFinancialReporting/XBRL/Pages/BenefitsandPotentialUsesofXBRL.aspx Brands, K. (2013). Happy Birthday, XBRL! Strategic Finance, 95(1), 56-57.
Brands, K. (2013). XBRL and Auditing. Strategic Finance, 95(2), 56-57.
Kernan, K. (2008). XBRL Around the World. Journal of Accountancy, (206:4).
Savage, M. M. (2008). Got Issues…with the SEC’s final rule for interactive reporting using
XBRL. Financial Executive, 24 (8), 34-36.
XBRL (2014). How XBRL Works. Retrieved from http://www.xbrl.org/how-xbrl-works-1