Free Impact of XBRL on Management Accounting Essay Sample
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Extensive Business Reporting Language has various effects on the accounting process. Amongst many applications, XBRL can be used to automate various portions of finance as well as accounts reporting processes. In return, major portions of auditing capabilities are enhanced by the use of this reporting language. Managerial impacts of XBRL cover the incorporation of technology into the management. Various organizations make use of XBRL in connection to internet based technologies. Through this process, organizations have helped eliminate the dependence on specific vendors.
XBRL have got quite a number of impacts on the management accounting. The first impact is realized in the data analysis techniques. XBRL has heavily supported the improvement of data analysis in accounting management. Through this reporting language, auditors can realize financial data very fast without any errors. This data can be validated through a cross examination done by XBRL’s taxonomy process of validation. Auditors can eventually obtain financial matrices within a very short span of time. Secondly, XBRL assists the accounting management in implementation of better risk management scheme. As a result of the improved data flow in the XBRL implementation, risk assessment is made more efficient. This is pegged on the ability of XBRL to offer faster, more accurate and comprehensive data sharing mechanism.
XBRL has equally led to the acceleration of continuous auditing implementation process. The language therefore helps the business auditors to retrieve and perform validation exercise on the data provided within a very short time. In addition, XBRL provides auditors with proper means of capturing audit transactions at very lower levels. This method therefore provides a proper method of eliminating any form of fraud.
The next impact of XBRL in the business management is attached to the improved internal control. The readability of the XBRL machine does away with any form of mathematical errors. The transferability of audit information from one machine to the other totally eliminates any form of manual manipulation. Risk assessment technique has helped improve internal control mechanisms.
Through the introduction of the Extensive Business Reporting Language, data tagging has been enhanced. Data tagging enhances proper phasing of financial reporting chains. In addition, XBRL helps in the distribution of vital statements of accounts. This data can then be downloaded and used for financial analysis. The entire process makes management efficient entirely in the organization. XBRL has also led to proper applications geared for the support of information modeling. This entails constraints, data structure as well as data types. Additionally, accounting concepts have a wide strategy for expression.
The three major initial strategies laid for XBRL include, storage of summarized financial information, definition of financial statements and exchange of financial data. Another improvement realized in the accounting management as a result of the incorporation of XBRL is related to spreadsheet proliferation (Bizarro and Garcia 62). The problems of proliferation historically based on the intensive blue-collar systems have been substituted. XBRL provides an information analysis conducted electronically via spread sheets.
Finally, XBRL has led to the enhancement of audit trials. The initial automation brought about losses due to the failure of paper based auditing. Through the implementation of XBRL, higher accuracy level has come up to bring about a resolution in the accounts management (Lester 5). XBRL data retrieved from a downloaded spreadsheet preserve vital information regarding the origin as well as the content. This information helps in the maintenance of any given audit trial. Data tagged through XBRL can flow between applications and through application of parser.