XBRL: Improving Data Quality and Transparency in Singapore’s Financial Sector
Corporate governance of any company is complex and subject to several rules and regulations. Regulators, professional organisations, and financial reporting authorities all around the world consider XBRL as a tool to improve data quality and promote transparency of financial information. With positive findings from a research study, ACRA implemented XBRL in Singapore in 2007 for corporate financial reporting. The primary motivation for ACRA’s XBRL adoption was the core value propositions of XBRL. Read on to find out how XBRL improves data quality and transparency in Singapore’s financial sector.
Data quality is foundational in regulatory reporting. High-quality data boosts confidence among users, paving the way for further automation across various business processes. Here, we explore how data quality rules can be implemented effectively using state-of-the-art XBRL taxonomies.
Rule of Completeness: Enhancing XBRL Data Quality
- Vital Role of Data Completeness: Ensuring comprehensive XBRL data quality is essential for reliable data analysis and decision-making.
- Automating Data Verification: Automating the verification process is crucial to guarantee that all reports include necessary XBRL data elements. For instance, a report missing essential details like the company’s name should be flagged automatically.
- Mandatory XBRL Data Elements: Specifying certain information as mandatory helps in performing comprehensive comparisons across various reports, boosting the utility of the XBRL data collected.
- Flexibility in XBRL Data Rules: While it is important to enforce data completeness to enhance XBRL data quality, maintaining flexibility is crucial. Overly stringent rules may exclude valid, non-standard data submissions, potentially leading to significant data gaps.
Rule of Correctness: Ensuring XBRL Data Quality
- Importance of Automated Correctness Checks: Automated checks are crucial for ensuring the correctness of XBRL data, which minimizes the need for data cleansing and boosts analytical confidence.
- Preventing Common Errors with XBRL Technology: XBRL technology is particularly effective at preventing frequent errors like inappropriate data types or incorrect data breakdowns, which are fundamental to maintaining high data quality.
- Enhancing Data Checks: Incorporating advanced techniques such as pattern recognition and range validations enhances the accuracy of XBRL data. These checks ensure that all submitted data, including financial figures, conform to logical and expected patterns, thereby guaranteeing high standards of XBRL data quality.
Rule of Consistency Across Reports: Synchronizing Data for Accurate Analysis
Ensuring data consistency across different reports is crucial for accurate aggregation and analysis. Automation can help achieve this by:
- Single-report consistency: Checks within a single report to ensure that totals and breakdowns match, and that computed ratios and balances are correct.
- Cross-report consistency: Validation that data from different submissions within the same period are harmonious, reducing the need for extensive post-processing adjustments.
- Cross-period consistency: Ensuring that data from different reporting periods aligns seamlessly, facilitating a coherent long-term data narrative.
Rule of External Consistency: Aligning with Broader Data Ecosystems
Data does not exist in isolation. Ensuring consistency with external master data or other system data is crucial. Implementing rules that either reference or integrate external datasets can significantly enhance the compatibility and usability of reported data across the enterprise.
The strategic implementation of automated XBRL rules in regulatory reporting not only improves the efficiency and accuracy of data submission processes but also strengthens the overall data governance framework. At Ƶ, we leverage advanced, open standard XBRL taxonomies- we follow both singapore SFRS taxonomy and ifrs xbrl taxonomy for international standard to deliver superior data quality and compliance, supporting your business through every step of its regulatory reporting journey. Embrace our expert-driven approach to simplify your regulatory processes, reduce operational costs, and elevate the reliability of your financial reporting.
How is XBRL Beneficial for Singapore’s Financial Sector?
XBRL Improves Data Quality
Financial data is one of the key components of any business in the financial sector. Since data is tightly integrated into the financial services industry, it must be free from errors. High-quality, error-free, clean data allows customers to trust their insurance companies and investment banks.
The basic rules for quality data include data completeness, correctness, consistency across reports, and consistency with other sources. XBRL is a tool that automates these rules and delivers full data sets without any errors. Furthermore, data generated in the XBRL format is consistent across reports and with other sources, making data much more compatible and usable across the business.
XBRL Ensures Transparency of Data
With the adoption of XBRL, ACRA has implemented a one-stop portal for all businesses, improving the efficiency and accuracy of financial and business information reporting. With the enhanced availability and quality of financial information, this one-stop XBRL portal improves the transparency of financial activities in Singapore. Such improved transparency promotes a favourable business environment crucial to Singapore’s economy.
Transparency in financial data can help the key players in the financial sector, such as investors and stock traders, make investment decisions. Furthermore, the data in the XBRL format can also be useful to regulators, financial analysts, and institutions.
XBRL Preparation – The Way Forward
While XBRL plays a crucial role in improving data quality and transparency for all businesses in Singapore, companies can find XBRL compliance an added burden. XBRL can be a time-consuming process that may shift your focus from your core activities. So how to get the best of both worlds? By outsourcing your XBRL requirements to a trusted vendor like Ƶ.
With an experience of over 19 years, Ƶ has successfully prepared over 400,000 compliance reports for more than 28,000 clients. The experts at the company have in-depth accounting knowledge and stay abreast of all the latest updates and regulations by ACRA. So what are you waiting for? Contact a Ƶ XBRL expert @ +65-31-582-850 or email enquiry@datatracks.com.sg to know more about our services.