Question
In: Accounting
Discuss the role of XBRL in improving internal controls in companies. In your response, please cover...
Discuss the role of XBRL in improving internal controls in companies. In your response, please cover an overview of XBRL briefly, the advantages and disadvantages of XBRL and its application in the industry and how this could improve internal controls in companies. (500 words)
( subject :- information system for accounting)
Solutions
Expert Solution
XBRL stands for eXtensible Business Reporting Language.
Charles Hoffman a Certified Public Accountant from Tacoma, Washington in 1998 found this.
It helps to improve clarity and making the financial information clear which is presented to the public.It uses standardized financial reporting elements to do this.It helps in monitoring the.
The over view of XBRL is that it uses XML format and it is intended to allow for the automatic exchange and reliable information of data to any software and technologies including the internet.The technical knowledge, vocabulary and meaning of the reports must be known while doing this.
Advantage : The information accessable to any one, there is lots of time to analyze data as there is no data entry,it could potentially improve its internal management reporting process as it can be used by other users,low cost for filing.
Disadvantage :It is useful for experienced person and inexperienced person would find difficulty in using it.As all the details are given there is lots of transperance of the company detais.The security to protect the data is also low.
It is applicable in the companies which are listed in stock exchange and has capital above 5 crores.It is a software which is used to store company information.It can be done even in a short term company.
It improves the internal control as it helps in monitoring the data and analysing the data.Quick decision can be taken using this.Saves time and has control over various data as it is computerized.
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