Inline XBRL bolstering SEC investigations

Inline XBRL bolstering SEC investigations

By Prathamesh 17 November, 2023

In a recent article for Bloomberg, legal analyst Kate Azevedo provides some keen insights into the US Securities and Exchange’s (SEC) expanded use of XBRL tagging to enhance enforcement.

Ongoing modernisation of rulemaking by the SEC has increased the list of US corporate filings tagged by Inline XBRL – with around 75% of US public company disclosures now containing machine-readable data. This has vastly improved the SEC’s ability to quickly parse filings for errors and violations in a cost-effective manner. To put it simply, it’s like turning on the lights in a previously dimly lit room, making it easier to identify even the tiniest details.

Azevedo points out that since the introduction of full Inline XBRL in 2021, the number of SEC enforcement actions has increased – especially in the statements that rely more heavily on XBRL-tagged data. For Section 13(b)2(A), enforcement actions doubled the year after introducing the standard.

Azevedo provides a reflection on the potential of structured data and an insight into how regulatory bodies are harnessing this power. It’s a reminder that Inline XBRL is not just about more accessible financial data. It’s also about how structured data plays a crucial role in enhancing regulatory efficiency, compliance, and cost-efficiency.

It should act as a loud bell for anyone that doesn’t take their responsibilities to accurately inform markets (and regulators) via their structured data disclosures. In a nutshell? Tagging matters.

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