The verdict on digital reporting from the FRC Lab

Two of our clients, Experian and Airtel Africa, were featured in the Financial Reporting Council Lab’s new report, ‘Structured digital reporting: improving quality and usability’, in which they were commended for their progress on ESEF compliance and innovative digital reporting.

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Friend

Two of our clients, Experian and Airtel Africa, were featured in the Financial Reporting Council Lab’s new report, ‘Structured digital reporting: improving quality and usability’, in which they were commended for their progress on ESEF compliance and innovative digital reporting.

The FRC's report notes first that:

"The introduction of structured digital reporting [i.e. ESEF regulations] brings corporate reporting into the digital era. However, it will only achieve its intended objective if the resulting structured reports are of high quality and are usable in practice."

The FRC believes that progress towards these goals has been made since last year, yet that many companies ultimately fall far short of true digital reporting, with both data quality and digital usability below levels expected from a leading capital market like the UK.

In terms of data quality, the report lauds Friend client Airtel Africa, who instituted a rigorous assurance process around their ESEF disclosures, bringing in several stakeholders including their own technical accounting team, Friend as their specialist ESEF implementation provider, and their external auditor.

Concerning usability, Experian’s advanced interactive XBRL annual report – developed using Friend’s innovative single-source content management system to be equally readable by humans and machines – was described as responsive, interactive and accessible. These crucial digital reporting functions are only now possible, and will enable companies to comply with the incoming requirements of digital regulation and growing stakeholder demands for something beyond print and PDF.

While many reporters used a PDF-to-XHTML conversion tool for ‘year one' of ESEF compliance, the FRC’s recent guidance concludes that, in terms of user experience, such conversions cannot compete with reports like Experian’s.

This innovative approach to digital reporting, known as ’native XHTML’, is also endorsed by the technical standards setters at XBRL International, who recognise that future digital reporting will require reporters and their specialist providers, like Friend, to make significant advances in terms of both process and software.

Written by
Friend