Some time ago I wrote about my concerns that there were not enough XBRL experts. That generated some interesting discussion, and led to one of the questions that I put to David Blaszkowsky, Director of the SECs Office of Interactive Data (OID). In a wide ranging conversation, more of which will be included in other posts, we talked specifically about the issue. As this conversation carried on from the previous, readers should accept that the standard disclaimer is still in place*.

(David, XBRL is not a new technology, but it is complex and does require significant effort to become an expert. What are your views on the whole are there enough XBRL experts question?)

DB: Well, one can argue that there are not enough home-grown XBRL experts, yet. But the pool of architects and developers is growing, and that growth is accelerating in response to the fact that companies and others are now really building XBRL applications and tools.  Let’s not forget:   XBRL is simply a specialized case of XML. As such, I fully expect the very large existing community of XML experts will be the source of a rapidly growing number of people with XBRL skills. This is an exciting, dynamic area that will draw in the talent. 

DB: Now, some people are more worried about experts in terms of the US GAAP mandate, that there might not be enough XBRL experts who also know accounting.  But, tagging is straight-forward enough in practice that it isn’t clear to me that financial reporting professionals have to be “expert” in XBRL generally rather than primarily in the tagging GAAP tags on GAAP line items and tables. 

DB: Of course, there are third parties such as universities, standards-setters, and trade associations who can play a role play a role in improving the breadth and depth of tagging and technical skills, and hopefully they are looking at programs to develop these skills.

(There is talk of a certification program. What is your view on a certification being offered by an organization that does not cater for individual membership? Would this hinder the update of such certification?)

DB: I’m not sure that is an issue;  many kinds of organizational models excel at training and certification, and the market can sort that out. But I think a number of organizations understand the importance of building the pool of expertise, and I'm sure they will consider how to best solve this problem. Personally I think that some kind of certification model could be a useful thing, and certainly would make an employer’s job easier, simply finding individuals with evidence of demonstrated knowledge.

DB: With the speed of implementation of the mandate it was probably reasonable to expect a somewhat lagged pace in development of resources at the other end of the business sytem, for tools to use and transform filed XBRL content.  As the inventory of useful filings grows, at a higher level there will be more need for a wider pool of expertise in software and analytics to serve the growing number of vendors, creators and consumers of Interactive Data. Again, I emphasize the relationship between XML and XBRL which should mean that it should be relatively easy for these people to learn XBRL.

(What factors do you think have hindered the growth in the number of experts?)

DB: Well, historically in the US people have equated “XBRL” with “XBRL GAAP” simply because that was the first major and most high-profile use case. It implied that in order to learn XBRL you also needed to understand GAAP. GAAP is hard, not XBRL.  And let’s face it, there were fewer people who understood both the complexity and the need of both XBRL and GAAP.

DB: That is no longer the case, not with GAAP done and new use-cases in non-financial information coming to the fore. Accounting knowledge as a prerequisite disappears when you start looking at mutual funds, ratings, or any other types of information. We need to get the word out that GAAP is old news from an XBRL perspective.   Also, Of the several other taxonomies we’ve worked with, none are even within two orders of magnitude – not a “factor of 2”, but “2 orders of magnitude” -- of the thousands of tags in the GAAP taxonomy.  I’m not sure any others we might consider will come close, either.

DB: The complexity of GAAP tagging scared people. The real issue was not XBRL for GAAP but rather the complexity of financial reporting, and the associated need to fit that complexity into the syntax behind the taxonomy, and to ensure that the standard could meet that complexity. Most other areas of business public reporting are not that complex and therefore should be simpler to model, tag, and use.  That said, I think you’ve got to recognize that GAAP XBRL tagging is working, and that “complex” is a relative thing, not an absolute.  Complexity gets tamed by experience, training and innovation, and that is already happening. 

(So you expect a rapid growth in the number of experts?)

DB: Oh yes.  As professionals realize that XBRL is simply a step on from XML, that powerful and even novel commercial tools and platforms can be built or adapted for it, and that being a GAAP expert is not always a prerequisite, I think well see a very rapid increase in the total pool of expertise.

(*) I promised David Blaszkowsky that I would include his official disclaimer: "As a matter of policy, the Securities and Exchange Commission disclaims responsibility for the private statements of SEC employees.  The views I am expressing today are solely my own, and do not reflect the views of the Commission, the Commissioners, or of any employees other than myself."