A world first: we analyse digital KAMS data from Japan
The introduction in recent years of a Key Audit Matters (KAMs) section is intended to provide insights into the most significant issues found in an audit report. These often represent risks of potential interest to investors. Until now, however, that data has been difficult to analyse.
That all began to change last year, when Japan became, we believe, the first jurisdiction to require digital tagging of KAMs using XBRL, making the data machine-readable. Of course, we at XBRL International were interested to know what new insights could be gained from digital KAMs data. Our Guidance Manager, Revathy Ramanan, has carried out an initial analysis, and she now kicks off a new series of short blog posts over in our Taggings section. Each will discuss a single graphic derived from the data, starting with an overview of key themes across all public companies.
We can already see that digital KAMs data provides value in helping form a picture of the risks identified by auditors. Although KAMs disclosures are text-based rather than numerical, insights can be derived using techniques such as keyword extraction and clustering across entire data sets – and digital tagging using XBRL makes that analysis vastly simpler and more reliable. Stay tuned for further posts to come.
Our thanks to XBRL Japan for helping us set the ball rolling. We are confident that further and deeper insights await explorers of this new resource – so let us know your thoughts!
Read more here.