Speech by SEC Chairman:
Welcoming Address to the AICPA Governing Council 2007 Fall Meeting
Chairman Christopher Cox
U.S. Securities and Exchange Commission
Marriott Tampa-Waterside Hotel
October 22, 2007
Good morning, and welcome to all of you who've come to Tampa to celebrate the AICPA New Year, which traditionally kicks off with this fall meeting of the Governing Council. We've just finished celebrating our fiscal New Year at the SEC, on October 1. None of this, I hope, will prevent us from celebrating New Year's Eve in a couple of months, or from enjoying the Rose Parade in Pasadena on January 1. When you come to think of it, we've got a serious amount of celebrating to do! So let's get started right away.
My contribution to these particular New Year's festivities is simply to say thank you. Thank you to AICPA for your vision and leadership as founders of XBRL US and XBRL International.
Thank you for your pioneering work in developing the XBRL codes for U.S. GAAP.
And thank you for playing a pivotal role in reaching the milestone I announced September 25 in New York, when the XBRL-US project team completed the equivalent of the Human Genome Project for accounting.
As of now, we've mapped every constituent concept within U.S. Generally Accepted Accounting Principles. The team that you helped build to do this created labels for more than 15,000 different individual facts that companies might want to disclose under GAAP. And they neatly organized them into 60 groups, so that any company can quickly find the particular tag it's looking for.
In the first quarter of 2008, the completed U.S. GAAP tags will be broadly exposed for public trial during what we're calling the acceptance phase. And here again, we'll be counting on AICPA and the entire accounting profession to share your expertise as we engage in that review.
Your profession was the first to see the benefits of reporting with interactive data. You saw the possibilities for streamlining the process of preparing financial reports, for eliminating errors, for reducing costs, for making audits less painful and more reliable, and for letting the users of financial reports get much more useful information out of the financials than has ever been possible before.
And now, as companies are beginning to hear about interactive data, the accounting profession has an important new responsibility to explain to managers and boards of directors how it works, and why companies should want to use it.
As we're meeting here, there's another enterprising group of men and women hard at work on interactive data: the software engineers. They're busy writing improvements to accounting and financial reporting software that will take advantage of the full potential of interactive data. They need to hear from you, too, so that the next versions of their software products are easy to work with, and meet the requirements of both the public companies who will use them to prepare their financials, and the investors who will rely on them to analyze the data.
Back in 1887, when the forerunner of the AICPA was first organized, the accounting profession was decidedly low-tech. At the end of the day, a company controller might spend three or four hours just trying to figure out where the last nickel went. And if the petty cash didn't balance, he might just take it out of his pocket and put it in. In the 19th century, the concepts were certainly there, but the technology was primitive. The adding machine was generations into the future, and even the humble pocket calculator was almost a century away.
Today, as trillions of dollars move across the globe each day, the basic precepts of accounting remain intact as the stable foundation of what's now a fantastically sophisticated financial system. And what makes these essential concepts work is not just that they've been refined for the modern age, but importantly, that they've been given broader reach than ever before because of technology. Our ability to instantly compile, distribute, and analyze numbers, and to routinize the consistent application of accounting principles through automation, means that accounting is even more valuable today, even as the job it's being asked to do has gotten far more complex.
At the AICPA, you've been visionaries in realizing the possibilities for not only a domestic, but a truly international means of exchanging financial information using common data tags. We're on the threshold of exciting changes that will usher in significant benefits for investors, public companies, and our global capital markets. Given the size and reach of global public finance, it's not overstatement to say we stand to improve the economies of every participant nation, and thus the entire world.
Such an ambitious agenda is probably too much to accomplish in a single New Year's celebration. It's a good thing we have more than one to work with.
It's a pleasure to join you, even if only by video, here in Tampa. As a final thank you, thanks for volunteering your time and for contributing your expertise, your judgment, and your integrity as a member of the Governing Council and the national leadership of AICPA. The accounting profession is a critical gatekeeper for America's investors, and wise leadership of the profession is a blessing we should never take for granted. On behalf of all of us at the SEC, we're proud to be your partners.