Unpacking the the UK’s digital reporting proposals
Reportl, a provider of digital-first reporting software, has published a primer for anyone preparing a response to the digital proposals in the UK government’s Modernising Corporate Reporting consultation. Eight of the consultation’s 60 questions concern the digital reporting framework, and responses are due by 30 November.
The primer walks through four changes. Directors would approve the digital formatting as part of approving the report and accounts, closing off the option of tagging after sign-off. Auditors would report on whether the report has been formatted in line with the applicable taxonomy and requirements, as auditors of EU listed companies have done for several years. Some disclosures could move out of the annual report onto company websites or portals.
Simultaneous sign-off is a key change. Many UK companies design the annual report as a PDF, convert it to HTML and tag it after the board has approved the accounts, a process the primer says often introduces errors and leaves little time for checking. Directors asked to declare compliance will want evidence of sound controls, and Reportl suggests listed companies start talking to their auditors about digital assurance now. It also argues for a phased “on ramp” to slowly build up capacity, pointing to the minimum tagging list that eased HM Revenue & Customs’ (HMRC) move to iXBRL tax filing from 2011.
Another pertinent aspect is the hypothetical alternative to XBRL in an age of AI. Reportl argues that XBRL’s durability comes from the taxonomies and the shared reporting definitions behind them. Any replacement would have to solve every problem XBRL has already solved, or leave those problems open and weaken the infrastructure for digital accounting data. It also cites a recent Securities and Exchange Commission (SEC) report noting research that structured data reduces error rates in large language models.
We agree, and the UK proposals broadly head in the right direction: director accountability for the digital report, assurance over it, and structured data as the foundation for AI-ready reporting.
Read the primer here.
