“Where’s the Beef?” in SEC XBRL Comment Letters?

Okay, yes, I’m a burger fan, and yes I’m from Wendy’s back yard in Akron, OH (just a trip up I-71 from the birthplace of the Frosty in Columbus, OH).  So it should come as no surprise that it’s with great fondness that I remember back to the Wendy’s marketing campaign in the mid-80’s with Clara Peller, the vocal grandmother who shows up at the generic competitor’s counter shouting “Where’s the beef?“.  I can’t help but see the comparison to the SEC XBRL-related mentions in Comment Letters.

Swapping burger dialect for questions raised at recent SEC Institute events I’ve spoken at, inquiring minds want to know if any of the XBRL comment letters have any “Beef.”  Just how far and how deep do they go regarding enforcing the various complexities of the XBRL mandate?  While the initial comments that started creeping out during the latter part of 2011 were all tactical hand-slapping, companies now want to know if anyone has been taken to task around something more “juicy,” such as general data quality issues or at the more extreme end, some type of legal proceeding due to an XBRL rules violation.

In looking at XBRL-related comment letters over the past 12 months, the reality is The Song Remains the Same at the SEC.  The comment letters continue to be very tactical in nature.  Of the 29 comment letters I reviewed that occurred during this time period, literally all of them relate to a company not complying with some fairly basic nature of the mandate, such as:

  1. “Hey, you forgot your XBRL in both the index list and physical files.”
  2. “Hey, you said you included your XBRL (in exhibit list) but you didn’t give us the files.”
  3. “S1/S3 acceleration request denied because of issues with XBRL submission requirements.”
  4. “Unfortunately, no, you can’t submit IFRS XBRL at this time and don’t bother asking again…we’ll let you know when you can.”

Long and short:  No Beef!  Over 4 years into the mandate, and the comments regarding XBRL continue to be focused on the very basics of the Interactive Data Final Rule.  In my best Clara Peller voice:  “WHERE’S THE BEEF?”  Obviously the beef is NOT in the recent comment letters. Save for an interesting morsel included in a comment letter dated April 15, 2013, in which the SEC provided the following commentary to a company that failed to provide it’s XBRL:  “We note that initially you did not file XBRL data as required. In future filings, please address this in your discussion of the effectiveness of your disclosure controls and procedures [DC&P].”

Way juicy for two reasons.  First, the comment itself might show the SEC moving beyond “just the basics” in their comment letters.   Second, DC&P is another topic on the mind of preparers, wondering where the line is since 404 wasn’t changed by the Final Rule. And yet it and comments on the SEC’s XBRL C&DI web page, discuss the need for a company’s DC&P to take into effect XBRL.  With this type of comment now out in the open, is it a sign of things to come or just a random blip on the continued tactical tranquility radar?

Blake’s Take:  While comment letter volume is admittedly still low, 2013 will be the start of SEC comments on more than just simple tactical aspects of XBRL.  Companies have had plenty of time to get the basics down; it’s time for the SEC to get their #beefon.

Calendar year 2013 is easily on path to see the most XBRL-related movement at the SEC since the start of the mandate itself back in 2009.  The premise is not that much of a stretch given the continued Accounting Quality Model (“RoboCop“) discussions by Chairperson White and Chief Economist Lewis, 2 EDGAR Filer Manual updates within the first 6 months and continued strong dialogue around bringing iXBRL into mandate play.  When it comes to “Where’s the beef?” around the XBRL mandate at the SEC in general and specific to comment letters, hang in there Clara Peller as I think you’ll soon be proud!