As companies continue learning and refining their use of XBRL, technology is advancing to enable XBRL-like tagging much deeper in the books and records.

A subgroup of the American Institute of Certified Public Accountants has developed a data standard for the general ledger and the accounts receivable ledger, and plans to develop more subledger data standards. The primary objective is to make auditing more effective and efficient, but the potential benefits are far greater, says Amy Pawlicki, director of business reporting assurance and advisory services at the AICPA. “UItimately, the goal is to have technology get to a place where you can automate lots of different cool analytics for purposes of external audit, internal audit, management, you name it,” she says.

The project is an undertaking of the Assurance Services Executive Committee of the AICPA. The committee's Emerging Assurance Technologies Task Force created a working group to establish an “Audit Data Standard” that would improve the audit process. The group developed a base standard that includes information on formats for files and fields that would be used in conjunction with each audit data standard document. Then it developed data standards for the general ledger and the accounts receivable subledger. Those data standards are final and ready for use, says Pawlicki, although they will be modified as necessary as companies use them and provide continued feedback.

“XBRL is a data standard, a format for tagging information in a common electronic format so different machines can all read and consume it,” says Pawlicki. “This is the same thing, but this is for information that's much further back in the reporting supply chain at a company. It starts at the bottom with the general ledger and subledger accounts, and then all of that rolls up to external financial reporting.”

When auditors arrive at a company to begin their work, they typically spend a great deal of time gathering data from different systems and normalizing it, or putting it into a common format, Pawlicki says. Standardizing data at a more granular level would save that step, she says. It would also prove useful inside the company for internal audit and for general management and decision-making within the business. “Eventually, companies will want and will see the value in being able to connect the dots and have their XBRL data flow through their system and automatically roll up to their external financial reporting,” she says.

The standards are not required by any regulatory entity, and the AICPA has not established them as requirements for the profession either, says Pawlicki. Still, “I'd think companies would want to have access to their own data in a consistent format,” she says. “Companies spend a lot of time gathering data in different systems and formats and normalizing it. That gets in the way of doing meaningful analysis.”

The working group will continue developing data standards for other subledgers. Procurement, order to cash and a number of others are on the agenda, says Pawlicki.