Speech by SEC Chairman:
Videotaped Introductory Remarks at the 2007 SBR/XBRL International Conference
Chairman Christopher Cox
U.S. Securities and Exchange Commission
2007 SBR/XBRL International Conference
Hilton International Brisbane
November 27, 2007
Hello, and g'day. I know you've already had a g'day, because you've had some excellent presentations this morning on the subjects of standard business reporting and interactive data. As you build on that, this afternoon and tomorrow, you'll hear even more about what an amazing global effort this really is.
There is, of course, interest from government regulators around the world, including those that are represented at this conference from Australia, Singapore, the United Kingdom, the Netherlands, New Zealand, and the United States. But despite that government interest, this is a private sector initiative first and foremost. From the accounting industry to the world of finance, and from academia to high technology, the private sector is leading the way in making financial and other reporting faster, better, and less expensive for companies and investors alike.
I have to say I'm a little envious of all of you today who are enjoying the glory of spring on the beautiful Queensland coast. Here in the northern hemisphere, the beautiful part of autumn is coming to an end, and winter is beginning to set in. But springtime is a more fitting season for what's going on at this conference, because interactive data is blossoming all around the world — and XBRL is ready to leave the nest and take flight.
Two months ago in New York City, I announced that the XBRL team in the United States had finished perhaps the most challenging reporting project to date in the development of interactive data. They mapped every constituent concept within U.S. Generally Accepted Accounting Principles — some 15,000 elements — into XBRL. It was an impressive feat, and it was all done in less than a year. That's put us on the threshold of making interactive data a reality for investors. Next week, on December 5, you'll be able to get this entire taxonomy for free, on the Internet. And so will every public company that uses GAAP.
Earlier this month, in Tokyo, I held a series of meetings with securities regulators from around the world to discuss the global schedule for converting to interactive data for financial reporting. What I learned is that things are moving fast with International Financial Reporting Standards as well. As you may know, we now permit IFRS in the United States. And we're working with the International Accounting Standards Board to upgrade the XBRL tags for IFRS.
The first company to file its IFRS financial statements with the SEC using interactive data did so on November 5. That coincided with the Commission's action just this month to permit foreign issuers to use IFRS without having to keep a second set of books in U.S. GAAP. As the use of IFRS and XBRL continues to spread across the globe, one can imagine that in the not-too-distant future, both financial reporting and the means of exchange of financial information will be standardized the world over. Once companies begin reporting their financial information using interactive data instead of the old way using documents and forms, markets will begin to digest that information ever more rapidly. We might even see a financial reporting version of Moore's Law, in which the speed of analysis constantly doubles every two years. That would undoubtedly make our markets more efficient, which would benefit investors, issuers, and economies everywhere.
But we don't need to gaze deeply into the future to see the big impact that XBRL is having in the here and now. The remarkable technological progress we've achieved in recent years is already helping users of financial statements to better monitor both the substance and the quality of reporting, whether in U.S. GAAP or IFRS. And it's also helping us to identify and prioritize the issues that have to be settled as we move toward convergence of these two systems. The work that software engineers are doing right now is guaranteeing that accounting and financial reporting software will be able to take full advantage of the potential of interactive data.
The SEC is keeping tabs on these private sector developments through our newly created Office of Interactive Disclosure. That new office is headed up by David Blaskowsky, who's with you today — and whom it's my privilege to introduce.
David is ideally equipped to lead the SEC's participation in the interactive data revolution. He's an 11-year veteran of McGraw-Hill, including over 7 years at the firm's Standard & Poor's division. He was their Director of Global Market Development for Institutional Market Services, and before that, a Senior Director in Equity Research Services. He also led S&P's Corporate Markets and Investor Relations Services. If that weren't enought, his resume also includes McKinsey & Co., Price Waterhouse, the National Investor Relations Institute, and the Canadian Investor Relations Institute.
In his current role, David is working with investor groups, analysts, and preparers of financial statements in developing the SEC's approach to XBRL. He's coordinating with virtually every key constituency in both the public and private sectors, in the U.S. and abroad, to advance the use of interactive data in financial reporting. Both David and I look forward to joining many of you in Vancouver next week for the XBRL International Conference.
So now I'll turn it over to David, but not without first saying thank you to every one of you for what you're doing each day to improve business reporting. Together, we've begun a revolution in the way financial information is exchanged across the planet. This is truly visionary work, and the SEC is proud to be your partner.