Recently we signed an MOU with XBRL-US, providing a new collaborative taxonomy tool called TRAX to help business experts review the work of taxonomy developers. The tool has now been launched and is ‘on trial’ through to the end of the year. Other parts of this site give you plenty of information on the tool. What follows is part justification, part theory: to put it into context.
Some of the most powerful new technologies today are loosely termed “social tools”. They provide a mechanism for collaboration. Our hope is that by bringing on-line collaboration into the middle of the process of creating XBRL taxonomies, project teams will build an increasingly familiar process.
It should become more than a process. It should be a ceremony – a set of steps that everyone involved in the exercise understands and expects everyone else to follow. Ceremony is a term that I’ve borrowed from the security folk, who are now using it to describe what is required to grant an electronic identity to someone. A good term, with wider application. What does it mean in the context of XBRL taxonomy development?
Not long after we started CoreFiling, we began to discuss taxonomies and, specifically, taxonomy review. The parable goes something like this:
The acolytes spend many days and long nights labouring over the construction of a set of definitions, that, once mangled with tools, scripts, or notepad, becomes a taxonomy. And they consider it good, if in need of some fresh eyes. Thus, each time that a taxonomy gets created a great hue and cry goes out. “Please review this!” beg the acolytes. Generally, although not always, their beseechings fall on a silent multitude of accountants, accounting standards setters, analysts and preparers. And then there is gnashing of teeth and tearing at hair amongst the acolytes. “We have built it. And yet they haven’t come,” they call out. And then (finally) there is some review by some people and the acolytes try to tell each other that it will be enough. But often it isn’t.
It seems to me that to create a standard, (and a taxonomy is a very specific kind of standard) you need subject matter experts to reach agreement about what the standard should say. Just as importantly, you need an authority that will publish it and maintain it. For the moment, let’s assume that authorities are easier to come by than subject matter experts. A topic for a later note, no doubt.
So, why is it difficult to get business experts to look at XBRL taxonomies to see if they will meet their needs? Well, there have been a bunch of reasons, including the rather obvious fact that until recently, quite a lot thought it would be a waste of time, as they didn’t want to create reports using XBRL. The tide in that area is changing quite quickly, so now there are very good reasons for business experts to review them. However, I think there are a couple of other important reasons they might continue to hold out, if it were not for TRAX (and no doubt its successors): Accessibility and Trust.
Subject matter experts tend to be much in demand, so, among other things, it’s necessary to ensure that they don’t have to waste time understanding something they don’t need to. Something like XBRL. Equally, subject matter experts are very unlikely to be able to spend very much time together, so it would make sense if they could collaborate over the internet. Combined – the need for the materials to be available in a form that is easily understood, and the need for the materials to be available at all hours of the day or night, anywhere on the internet, captures what I mean by “accessibility”.
Finally, subject matter experts need to trust that, if they are going to put effort into reviewing something, their comments will be used and not ignored. Transparency in the comment process is really important to their commitment. Nothing seems to put people off faster than not seeing how their contributions have made a difference. That’s trust.
So, TRAX, which came about following some discussions internally, and then with our good friends at both WebOrganics and the one and only Galexy, is the result. It’s kind of nice that this collaborative tool was built collaboratively! We hope that TRAX will make the process more accessible, since we can skin it to make even XBRL seem reasonably straightforward, and since it is a creature of the web, merely subject to continuity of power at a very big, very red building in the London Docklands, it should be nearly ubiquitously available. And we hope that trust will be pretty straightforward, as you can always see “My Issues” and how they have been dealt with by other commentators as well as the project moderators. Creating a whole new set of incentives.
So while the system gets put through its paces (and there are a number of new features that will get added during the course of the trial, and no doubt a number of bugs stamped out as well), we’ll be most interested to see if it helps make it easier for subject matter experts to give a little of themselves. And perhaps a new type of ceremony will start to get created.
If you would like to contribute to the review of the XBRL-US Broker-Dealer taxonomies, please contact Brad Homer (bhomer) at (at) the AICPA (aicpa dot com). If you have your own taxonomy project and would like to experiment with TRAX, please drop me (john turner at corefiling dot com) a line.