SEC Filers’ Errors in XBRL Format Dropped 64% by Using DQC’s Validation Rules
The XBRL US Data Quality Committee (DQC), of which CFA Institute is a member, develops guidance and validation rules for companies that can prevent or detect inconsistencies or errors in extensible business reporting language (XBRL) data filed with the US SEC.
The DQC conducted an analysis recently to measure the effectiveness of its first set of validation rules — which enabled validation of more than 1.9 million data points in the first quarter of 2016. The rules identify potential errors, such as incorrect negative values and incorrect dates that impede the automated analysis of data. The results are impressive! Errors for all SEC filers were reduced by 64% for the data covered by the rules (as the following chart shows).
Rule Results per Quarter, All Rules and All Filers
There was a 70% decrease in the number of errors over the same time period for accelerated filers (that is, large companies with equity securities valued at more than $5 billion), according to the DQC, whereas smaller reporting companies had a 60% decrease in the number of errors.
We are very heartened by these results and encourage more companies to follow the DQC’s validation rules, which are freely available.
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1 thought on “SEC Filers’ Errors in XBRL Format Dropped 64% by Using DQC’s Validation Rules”
Mohini, there must surely be a clearer headline for this post than the one you used. What % of readers on this blog do you think know what XBRL or DQC are?