This article provides an overview of each of the key automated verification tools in the Wdesk XBRL platform and how they work together. Using these tools in conjunction with one another promotes XBRL technical conformity needed for SEC acceptance, EDGAR consistency, and accounting-based correctness of your filing.
Key Automated Tools and Their Roles
The three key verification tools in Wdesk include:
XBRL Document Check
There is some overlap among these validations.
XBRL Validation fully encompasses the set of checks needed to pass acceptance by the SEC. The XBRL filing package is passed through an XBRL processor that performs multiple layers of tests and checks.
There are three distinguishable parts to XBRL Validation:
XBRL specification compliance
SEC EDGAR Filer Manual compliance
FASB Taxonomy Architecture best practices adherence
Adherence to the FASB Taxonomy Architecture best practices dramatically improves the readability in the SEC Viewer. However, this is not required by the SEC for filing acceptance.
XBRL Document Check
A perfect filing can’t be reduced to technical or specification compliance. What really matters is the consistency and accuracy of the data being communicated, as it relates to what is disclosed in the given EDGAR report. This is where XBRL Document Check comes in.
XBRL Document Check executes within Wdesk, and in doing so, it has access to the EDGAR document and XBRL data simultaneously. When it runs, it performs a set of checks and tests, in an attempt to confirm the consistency of the reported data between the two data formats.
This means that XBRL Document Check can catch some EDGAR requirements that otherwise would be undetectable during XBRL Validation. XBRL Document Check inspects all tagged locations of a given fact and warns you if the XBRL fact value is reporting at a more precise or less precise representation of a given number when compared to its visual presentation in the financial report.
Data Quality Validations looks at the meaning of the information from a business and accounting perspective, as well as XBRL modeling expectations. For example, Data Quality Validations identifies values that may have the wrong sign. This is the single most common error in SEC XBRL filings.
The importance of Data Quality Validations continues to increase as the SEC expands their enforcement of these issues. Data Quality Validations combine best practices from subject matter experts, professional services, and our customers.
Other inputs include best practices from XBRL.us, EDGAR Filer Manual rules, and XBRL syntax compliance, as well as input from data consumers. In addition, SEC staff observations and best practices from FASB (US GAAP Taxonomy) are utilized.