Evaluating the Quality of XBRL-based Financial Reports

From the time public companies started submitting XBRL-based financial reports to the U.S. Securities and Exchange Commission, I have been looking at those reports, trying to understand the XBRL-based reports, and trying to figure out how to get them right.  That information was used to figure out how to create software applications that help professional accountants get these reports right.

Here is information that summarizes my testing and results which I stopped doing March 31, 2019:

• Analysis of the high level accounting relationships in the 10-Ks of about 5,716 financial reports (5,063 public companies, about 89.1% got all these high level accounting relationships consistent with expectation, 623 were inconsistent and manual confirmation revealed the inconsistency was an error)
• Documentation that helps you understand 26 different types of errors in XBRL-based reports
• High quality documentation of hundreds of errors in XBRL-based reports submitted by public companies to the SEC
• Documentation that helps you understand the notion of fundamental accounting concepts and reporting styles

Others are also finding errors.  Here are links to information that others are providing related to the quality of XBRL-based financial reports and other information I had laying around for assessing the quality of XBRL-based financial reports:

• Strong correlations between ESEF quality, country and audit firm (post on LinkedIn) (2022)
• XBRL Logic Quality Score Dashboard (Q2 - 2020)
• SEC implying quality problems with their release of a sample letter relating to XBRL report quality issues
• Analysis of the DOW 30 XBRL-based 10-Ks for 2021 (here is documentation)
• Analysis of the Fortune 100 XBRL-based 10-Ks for 2021 (here is documentation)
• Rigorous Analysis of Microsoft 2017 XBRL-based 10-K
• Campaign to Improve Disclosure Quality
• Disclosure Best Practices (web page)
• Disclosure Best Practices (document)
• Comparing Disclosures: Level 3 Text Block and Level 4 Detail
• Disclosure Best Practices
• Disclosure Analysis Set 1
• Disclosure Analysis Set 2
• Summary Analysis of Disclosures
• Analysis of 6,751 XBRL-based Public Company 10-Ks Submitted to SEC

Professionals will study this information.  The quality of reports will improve as will the capabilities of software to detect errors.  Software used to create XBRL-based reports can use this information to help them help accountants using their software do a better job in creating machine readable reports.

For more information, check out the Seattle Method which is the approach I developed to avoid the types of mistakes that myself and others are pointing out. Also, check out Auditchain Luca, the world's first expert system, which is software being developed to create high quality XBRL-based financial reports.