Busted: Six Digital Reporting Myths
Europe risks losing ground. Digital reporting isn’t “extra paperwork” — it’s the digital key to corporate transparency, enabling information to be discovered, compared, and trusted at scale. Inline XBRL (iXBRL) can be read directly by people, yet also reliably processed by machines. It’s the modern starting point for trusted corporate data.
Many jurisdictions have already embraced digital-first reporting. Yet in the EU, some voices are calling for delay, putting competitiveness at risk. Why? Let’s look at — and dismantle — six of the most common myths, with a European focus.
Myth 1: AI makes digital reporting obsolete.
Digital reporting and AI go hand in hand. Without structured data, AI is like a self-driving car without GPS: it may move from place to place, but no one should risk their savings on the destination. AI performs best with high-quality, structured inputs – and without that foundation, it guesses, misses context, or hallucinates. AIs can’t interpret the complexities of nuanced corporate reports with the accuracy or consistency that professionals need. Unstructured formats like PDF will always introduce risk.
Where digital reporting is established, it is already delivering high-value inputs for AI. In the US, the SEC’s EDGAR system provides over 15 years of structured filings and distributes roughly 3,000 terabytes of data every year – a petabyte-scale foundation for trustworthy AI analysis. Japan’s EDINET and South Korea’s DART offer comparable depth, while India is quickly closing the gap.
As AI innovation lets more people use corporate data in new ways, digital reporting is needed more than ever. It’s essential if AI tools are to reach their full potential. While PDFs force each AI to do its own guesswork, digital reports get tagged once – giving every AI direct access to each company’s single version of the truth. It’s authentic, authoritative, unambiguous, analysis-ready data.
Myth 2: PDFs are already digital.
PDFs are not truly digital – they’re more like paper under glass. That’s great for human readers, but it locks information away from any kind of reliable, large-scale analysis using computers.
Let’s say you’re an investor and you want to know which EU companies have the most debt, on and off-balance sheet, relative to their assets. If you stick to PDFs, your first challenge is to find and download 4,000 files. But even once you have them, there’s simply no way to go through them all, accurately locate and extract all the numbers you need, and make any kind of timely comparison.
Digital reporting gives users what they need: data in a usable, machine-readable form. Computer-friendly digital tags turn a 300-page report into a resource you can search, compare and analyse at lightning speed. Information providers can extract what they need for their customers, from every company’s report, in seconds, not hours or days. Investors can easily uncover accurate, actionable insights across thousands of reports. Automated analyses and routine checks become possible, for example for regulators and supervisors scanning for risks across industries. iXBRL reports are accessible, usable and visible – and to human readers they look just like a traditional PDF report, with the same attractive graphics and unique design that companies want.
Myth 3: Digital reporting is too expensive.
Digital tagging is like the key to a car: a very small part of the cost, but essential to make the whole system work.
Yes, digital tagging has a cost – but it’s a tiny fraction of the total cost of reporting. Large listed companies spend thousands of person-days each year on their annual reports. In comparison, the 3–10 person days needed for digital tagging and review is pocket change, representing less than 1% of total effort.
In the EU, the “bolt-on” costs of digital reporting are already modest. Competitive vendors offer tagging and filing services for as little as €1–2,000, with prices continuing to fall as the market matures. These charges typically cover applying the taxonomy to a report, software access, validation, and filing support. Even for larger, more complex issuers, the incremental expense is small when set against the hundreds of thousands (or even millions) already spent each year on preparing, designing, auditing, and publishing annual reports. In short, digital reporting is not an undue burden: it is a low-cost gateway to high-value data.
Just as in other markets, integrated systems that offer traceability, process automation, large scale collaboration and control, and straight-through report generation are rapidly coming to the fore in the EU. Efficient, streamlined digital tools certainly cut risk and can even cut total reporting costs for preparers in the long term.
Meanwhile, accessing and analysing digital data becomes dramatically cheaper and faster for all users. Healthy markets and investor visibility pay back company tagging efforts many times over.
Myth 4: Investors don’t want iXBRL.
Investors, like most people, are focused on outcomes. They rarely ask for specific technologies or acronyms. What they do ask for is timely, comparable, analysis-ready data, and reliable, actionable insights. Structured reporting is the infrastructure that meets that need – which is why investor bodies have urged the EU to accelerate and streamline digital tagging. ESMA’s recent consultation on the evolution of ESEF found that data users very strongly supported the digital, iXBRL-based ESEF format, for both financial and sustainability reporting.
Data providers will always play an essential role, but with structured reporting they no longer need to waste effort extracting numbers from PDFs. Instead, they can focus on adding insight and context. At the same time, direct access to raw, issuer-reported data matters enormously for investors and analysts. It provides a traceable anchor, allowing investors to verify that the numbers their information providers distribute always tie back to the company’s own disclosures. That builds trust and accountability in the market. This transparency is especially valuable for smaller and mid-sized companies, and for issuers in smaller markets, which may be overlooked by commercial vendors but often present some of the most interesting opportunities.
While European investors are keen to use digital financial reports in the ESEF format, some important pieces of the puzzle are still missing. Only annual financial statements are currently digital, leaving them stuck with PDFs for sustainability and other financial information. Critically, reports are not (yet) available via a single portal, like the US EDGAR or Japan’s EDINET, but that is set to change with the introduction of the European Single Access Point (ESAP). Analyst coverage has been dropping in the EU, reflecting current limitations, and it is crucial that Europe does not lose momentum. Some Member States have not yet ironed out inconsistencies between local corporate law and the EU’s Transparency Directive, meaning that it is possible that companies can publish a PDF version of their reports before the digital version. Clearly, that’s frustrating for users and issuers alike.
Myth 5: Digital reports are difficult to compare.
Digital reporting drastically improves comparability. Precise digital tags enable software to identify and compare equivalent disclosures across different reports. Accurate, large-scale cross-company and time-series comparisons get exponentially easier and faster. That’s especially important in the EU, where reports are published in many different languages. In a digital report, the same tag is always used and can be easily identified by a user anywhere in Europe, or around the world.
At the same time, digital reporting is not about limiting what companies can report: it’s about providing a useful, computer-friendly twin of the paper-style reports they’ve always made. Every company and every report is unique. That’s why iXBRL allows companies to create their own custom tags instead of using a standard one: it is not the role of digital reporting to normalise or conform company reports to a one-dimensional template. Regulators like ESMA work to support companies to strike a balance between comparable standard tags and flexible custom tags for novel, unusual information.
Myth 6: Digital reports contain too many errors.
Errors largely come from weak processes, not from reporting formats. In fact, structured data surfaces inconsistencies that can hide in PDFs – improving quality control before investors and regulators rely on the numbers
It is true that tagging errors can and do happen, but these can be efficiently caught using data quality rules for inbuilt, automated validation checks – as are other errors and inconsistencies that might otherwise go unnoticed, particularly across complex reporting requirements. Tagging errors tend to fall substantially over time, particularly with robust feedback loops in place.
The truth: digital reporting is vital to healthy business.
Digitisation enhances the efficiency, comparability and transparency of corporate reporting. It offers a huge return on minimal investment, delivering exponential benefits. It means wider access to data, hugely faster, more sophisticated analysis, and enhances abilities to spot emerging risks and opportunities for users across the board. It just makes no sense to skip the benefits of digital reporting for sustainability disclosures, let alone financial ones. It’s essential for healthy capital markets, robust decision making, and efficient global business.
Structured digital reporting is the infrastructure of trusted, AI-ready markets. We live in a digital world, and we need ambitious, consistent, large-scale digital reporting.
