Friday, March 16, 2012

Terminology: Verify

Lots of people creating XBRL ask questions like, "Is my XBRL valid"?  Before any other discussions, it's important that we are all using the same terminology.

When you create a business report you want it to be as accurate as possible.  For financial documents (ignoring XBRL), there are various workflows and terminology to help you accomplish this.  You want to check your footing, tick-and-tie, run through checklists, or have someone audit the document.  All
of these activities ultimately have the same goal: to verify that the content of your report is correct.

Automated validation is important--imperative--but it is far from sufficient to completely verify your document.

You can verify an XBRL document via a combination of several disparate processes:
    * Automated Validation
    * Computer-Assisted Review
    * Manual Review

Automated Validation

XBRL was designed to incorporate built-in validation mechanisms such as the "calculation linkbase" which to some extent can check your footing.  Because of the semantic nature of XBRL, there are now additional suites of checks (such as the EDGAR Filing Manual, the Global Filing Manual, the Financial Reporting Taxonomy Architecture [FRTA], and more) which can be fully automated.

Computer-Assisted Review

The goal of computer assisted review is have the computer pick out anomalies, or show you pointed lists.  For example, you might wish to view a short list of the set of unique dates that you used in your filing.  Or perhaps you want to look at concepts that are used in more than one report section (a.k.a. "network", or "extended link").

Computers are also good for searching.  Therefore, you might want to ask questions like "Let me examine all inconsistencies", or "Highlight all negated concepts"

Manual Review

Sometimes you just want to look at, say, the Balance Sheet for a visual review.  It is important to be able to render XBRL documents in your favorite format (like Excel).  Even more important is the ability to interact with the document, since it's hard to see the inter-connectedness of XBRL in a two-dimensional medium.  For example, "Show me the calculation behind this number", or "what does this text block really look like?"

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