XBRL in South Africa: An Update
This is a guest post from The South African Companies and Intellectual Property Commission.
For a number of regulatory bodies around the world, the monitoring and oversight roles they play are made more complex by the changing context in which they function. The Companies and Intellectual Property Commission is one such body (a South African government agency), mandated with the registration and regulation of companies within South Africa. With that mandate comes the responsibility to ensure that the financial reporting standards applied by companies are above board.
What has been achieved since the iXBRL launch?
Since the introduction of mandatory iXBRL tagging for the financial reports of publicly listed companies on 01 July 2018, until the end of June 2020, the CIPC has received 24 566 successful submissions.
Figure 1 below is representative of the number of filings, based on the type of entity that has filed annual financial statements. However, the capabilities of XBRL only become useful for this kind of trend analysis if the data captured is complete, accurate, consistent, and correct. It is encouraging to see a high number of private companies voluntarily filing their annual financial statements using iXBRL.
Quality of the data submitted
To ensure the data is useful, the CIPC has embarked on a data quality monitoring initiative and is establishing a Data Quality Monitoring Committee to address data quality issues observed in the Annual Financial Statements that have been submitted. It is positive to see that the market, to a large degree, submits iXBRL files successfully and without any issues on the first attempt, and so the number of submission attempts is low.
The graph in figure 2 depicts the kinds of intentional circumvention of the Companies Act requirement. It represents the age of the Annual Financial Statements. A vast majority of filing happens within 17 months of the financial period end.
The Road Ahead
The potential for improved data analytics and financial analysis within the CIPC will enable it to play its regulatory role more effectively. The road ahead also includes the CIPC sharing iXBRL data with external stakeholders – iXBRL offers the potential to improve data quality issues, and allows the CIPC to actively engage the market and other regulatory bodies to work together.
A number of African countries – namely Ethiopia, Sierra Leone, Kenya, and Uganda – and a number of international countries – inclusive of Abu Dhabi, New Zealand, and Canada – have engaged CIPC formally and informally to better understand the CIPC’s XBRL Implementation journey. Such engagements ensure that regulators across countries can benefit from sharing experiences, learnings, and methods as the regulators’ understanding and use of various complementary technologies and frameworks mature.