Views on improving the integrity of global capital markets
01 April 2021

Data Amplified: Why Data, Reporting, and Digitization Matter to Investors

Posted In: Big Data, XBRL

Investors should care about the latest trends in business reporting—even the technical stuff—quite simply because information is the lifeblood of investment decision making, and it’s reporting that keeps that lifeblood flowing.

We have all heard the phrase “garbage in, garbage out,” but using business data is about more than just avoiding outright garbage. The best and most nuanced decisions come from the best and most nuanced information. Data need to be reliable, relevant, and easy to access and compare. This makes the question of how business performance is measured, reviewed, published, and analyzed an essential one. 

Many investors treat the data that they use (however it arrives) a bit like their car. They know how to use it and how to extract safe and even exceptional performance from it when it is on the road, but they have no interest in what happens under the hood. Around the world, more and more of the data being used by investors are now being published in a digital format from the companies themselves. It’s a bit like shifting from a straight-six to a hybrid electric engine. Understanding that shift can help the driver get more out of it.

That’s exactly what will be under discussion on 14–16 April at Data Amplified Virtual, a free online event hosted by XBRL International. This virtual event will unite people who have a shared interest in digitization and the changing reporting landscape, structured data, technical standards, and related topics. It will include deep dives, discussions, and expert speakers drawn from among regulators and government, accounting and auditing professionals, and software and systems developers. I would argue that it is crucial for investors to be part of the conversation, too.

One of the current seismic shifts in the reporting landscape is a dramatic broadening of scope to include environmental, social, and governance (ESG) and other nonfinancial risks, impacts, and value. Standards and reporting mandates are developing rapidly, driven in significant part by the need to provide investors with the relevant, high-quality, and comparable information they want and need. Undoubtedly, ESG and nonfinancial data are of growing importance in decision making, and who better than investors to say how the next generation of corporate reports will be used and compared; what information they really need; and how regulators, policy makers, and technologists should ensure usefulness?

The event also will explore the future of audit and the implications for assurance of reporting in a digital age. This presents an opportunity to think through the issues and challenges, and understand how independent review can contribute to decision quality. If you have ever wondered what you can do to understand and ameliorate reliability concerns, this is a discussion for you.

Although it can seem rather technical, the digitization of reporting and, in particular, the modernization of the XBRL standard brings important opportunities for anyone who uses reporting data. For example, new approaches allow for more revealing interrogation of information, while a shorter, flatter learning curve makes it easier to get started. A clear path to integrating XBRL data into a host of other systems and processes offers new decision-making possibilities, including greater use of artificial intelligence, big data, and real-time analytics.

Joining the conversation on data and reporting means helping to shape the future and encourage useful, relevant disclosure, while at the same time, keeping your finger on the pulse of available information and retaining a competitive advantage in this rapidly transforming digital world.

Photo Credit @ Getty Images / Westend61

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About the Author(s)
Mohini Singh, ACA

Mohini Singh was director of financial reporting policy at CFA Institute. She represented membership interests regarding financial reporting and disclosure proposals issued by the FASB, the IASB, and others. Singh holds the Associate Chartered Accountant (ACA) designation.

1 thought on “Data Amplified: Why Data, Reporting, and Digitization Matter to Investors”

  1. Bev kennedy says:

    So why the disclaimers by bank owned dealer brokers (electronic services) that have retail investors consent to errors omissions etc etc in the data feed relayed to them as a service as contracted out by the dealer broker.
    E.g. td banks Tdw etc pdf 595636 clauses 4 and 5? And TD is not the only financial industry player with such self serving terms of service, contrary to its duties for managing risk when outsourcing to third parties (see osfi B10)

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