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US profession predicts upsurge in XBRL to comply with DATA Act

Source: The Data Coalition

The US Institute of Management Accountants (IMA) and the American Institute of Certified Public Accountants (AICPA) said the recently enacted Digital Accountability and Transparency Act (DATA Act) will considerably increase the use of the standard eXtensible Business Reporting Language (XBRL) for US government and business.

The DATA Act, passed in April, aims to facilitate full disclosure of federal spending. It further develops the Federal Funding Accountability and Transparency Act passed in 2006, sponsored by the then-Illinois senator Barack Obama.

The 2006 Act imposed disclosure requirements for every entity or organisation receiving federal funds beginning in fiscal year 2007. The DATA Act will enhance transparency by holding accountable all federal government's agencies for their spending.

To that purpose, the DATA Act requires the US Department of the Treasury and the Office of Management and Budget to adopt appropriate data standards, XBRL being the best choice according to IMA and AICPA.

As defined by IMA, XBRL is a widely accepted standard developed by a consortium of different stakeholders that is used to communicate financial and business information electronically.

IMA board member and chair of the technology solutions and practices committee Brad Monterio said XBRL meets the requirements of the DATA Act as it's an open-source and multi-platform technology, able to be used across different systems within federal agencies.

"Not only does the XBRL standard help hold the federal government accountable to its taxpayers and serve the public interest, it gives management accountants working in government greater ability to access, manage and analyse their business data more effectively," Monterio said.

The AICPA said the DATA Act's provisions point to adoption of XBRL for the reporting of federal budget and spending information, a standard it promotes because it makes data more readable, searchable and moveable for easier analysis of information.

AICPA president and chief executive Barry Melancon said: "By signing the DATA Act into law, President Obama has paved the way for implementation of a system that will allow each and every one of us to track federal spending data more easily."

Melancon also thanked the representatives and senators who championed the DATA Act and added: "These lawmakers recognise that the ability to monitor the flow of federal dollars is a cornerstone of good government."

The Data Transparency Coalition (DTC), a trade association which supported the adoption of the new legislation, said in a statement that the Data Act will replace inaccessible documents with standardized, searchable data, freely accessible to all.

"The DATA Act will create better transparency for taxpayers and citizens; improve federal management by illuminating waste and fraud; and reduce compliance costs by automating the creation of reports by grantees and contractors," the DTC said.

Related story

US Congress adopts full disclosure of federal government spending

Related links

The US Institute of Management Accountants

The American Institute of Certified Public Accountants

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