In 2009, the Securities and Exchange Commission began requiring U.S. public companies to report their financial statements in the XBRL open data format. The SEC intended to begin an industry-wide transformation from document-based financial reporting to open, searchable data, which could be automatically compiled and reported by companies, and automatically analyzed by investors and markets. The SEC's decision was the U.S. government's most ambitious open data project until the DATA Act was enacted, five years later.
But the intended transformation did not occur, and still has not, nearly a decade later. The SEC's open-data financial reports remain complex and difficult for investors and markets to absorb. Beyond the financial statements, the agency continues to collect most corporate disclosures as old-fashioned documents.
Open Data for Financial Reporting examines the ideas behind the SEC's initial move toward open data, critiques the agency's failure to fully transform corporate financial reporting from documents into data, and recommends a new pathway to fulfill the promise of open data for U.S. public companies, investors, and the capital markets.