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Companies House has launched an investigation into why large firms have resisted its efforts to increase public access to financial records by releasing them as open data.
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Corporate indifference prompted experts to demand they be forced by law to stop sending their financial accounts to the public register on paper, where they can only be released to the public if they are scanned and published as PDFs, which people cannot re-use unless they copy the data out by hand.
It is widely believed that, although two-thirds of companies have filed their accounts as data, those are mostly small businesses whose accountants use software that does so automatically. Large corporations are believed to be refusing to co-operate with the scheme.
Companies House recently launched a probe into the matter, after coming under scrutiny in a Computer Weekly investigation. "We are embarking on research to find out what the barriers to digital filing are for large organisations," said a Companies House spokesman.
The records office has been reluctant to speak of the trouble it has had getting companies to file electronically, something it has been trying to do since 1995. It seemed to find success in 2011 when UK tax regulations mandated companies file their accounts in a form of hybrid data document called iXBRL, created for the purpose by HM Revenue & Customs (HMRC). But large companies required by law to submit accounts data to HMRC have still been sending it on paper to Companies House.
Companies House has since conceded it must ask Parliament to change the law to force companies to submit their accounts as data.
Philip Allen, who created iXBRL under contract to HMRC, said large companies withhold data from the public register because they want to restrict its publication.
"The only hold-out at this point are the big four accounting firms. Transparency isn't at the top of the list of things they are trying to achieve. XBRL means giving more information because it's easier to search and pull things out of it. Companies House has not managed to win over the big four and will not do so until it's mandatory," said Allen.
Olive Browne, iXBRL expert with one of the big four accounting companies, PricewaterhouseCoopers (PwC), confirmed the government must mandate iXBRL before large companies would use it in public filings: "The government has to make it as widely available as it can. I think they should make it available in iXBRL, but there should be a mandate," she said.
John Turner, president of the XBRL International standards body, said: "Public companies are rightly very conservative about what they decide to disclose. We should let industry adapt over time. Large companies already have a well defined heartbeat disclosure mechanism, but it's not focused on Companies House," said Turner, referring to the regulatory news service (RNS) of the London Stock Exchange.
"Companies House filings are not relevant to investors. I can always go and acquire the glossies if I'm interested in something buried on page 119 of the BP accounts - that goes through RNS. It doesn't go anywhere near Companies House.”
FTSE100 opts out
Chris Taggart, chief executive at OpenCorporates, a business information supplier that re-purposes the registrar's bulk iXBRL downloads, said large companies withheld their iXBRL accounts because government gave them the option.
"If you look at the FTSE100 companies - I don't believe any of them are filing in iXBRL. And none of the listed companies - there may be one or two, but I'm not aware of any," said Taggart.
"It should be mandatory for all companies to file in iXBRL. I think it’s just a question of political will."
Maciej Piechocki, technical developer of XBRL standards at the International Accounting Standards Committee Foundation, said large companies wanted to avoid the cost of rendering complex consolidated accounts as data.
"Why should you do this if the regulator is not forcing you to do it? There are few companies worldwide that would file voluntarily any XBRL accounts - especially the large consolidated companies,” Piechocki said.
"Have a look at the financial accounts of HSBC - what is it, 600 pages? Compared to the balance sheet and income statement of a smaller company, it's huge."
Companies House itself has been converting even the electronic filings it receives into a PDF format that prevents people manipulating the data on a computer, despite such data being the centrepiece of its strategy since 2013. While it has released companies’ data as bulk downloads for information services providers, it has published PDF versions on the public register.
Read more about XBRL data standards
In this Q&A, find out why one expert thinks XBRL has the potential to be more useful than finance executives give it credit for.
The US SEC has mandated that all public companies must use XBRL. Learn more about XBRL and how to comply with the SEC mandates.
A software tool is needed to convert data to XBRL format. Use this guide to choose XBRL software wisely.