Documente Academic
Documente Profesional
Documente Cultură
Online ISSN-2347-7571
Keywords: Cyber Security; Digital Signature; Reporting Language; Centralized Database; Instance
Document
INTRODUCTION
An institution which rejects change is an example of decay; the only institution which does not change
is the cemetery. Change and dynamism is also inevitable for a business entity. An artificial juridical
personality cannot have its own physical language. As such, they opt for a technical language in the
shape of financial information in figurative form. This rests upon quantitative measurement of
exchange of resources and recording it as a transaction. This continued from period Before Christ (BC)
till the 20th century, when the whole world was revolutionized by the emergence of Computer and
Information Technology (CIT). Originally, the ambit of CIT and computer generated information was
confined to US Army for their defense communication purposes. However, subsequently it was made
open for public use. With the advent of CIT, nations across the globe initiated the integration of all the
processes with Information Technology (IT). This raised issues relating to legal reforms, business
process reengineering, change management and infrastructure creation. Accordingly, as a pioneering
effort, the United Nations General Assembly by a resolution dated 30th January, 1997 adopted the
Model Law on Electronic Commerce which is referred to as the UNCITRAL Model Law on ECommerce.
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Simple tasks may be easier for public sector agencies and citizens to perform through
electronic government access. Many changes, such as marital status or address changes can be
a long process and take a lot of paper work for citizens. E-governance allows these tasks to be
performed efficiently with more convenience to individuals.
E-governance is an easy way for the public to be more involved in political campaigns. It
increases voter awareness, leading to an increase in citizen participation in elections.
Globally, countries like the UK, US, Canada, Australia, Singapore, Hong Kong have taken proactive
measures to bring the benefits of IT to the masses. They have framed policies and procedures to
achieve e-governance. In the UK, it was sought to make 100 percent of the government services
carried out electronically by 2005. In Australia, all appropriate federal government services are
delivered electronically since 2001. In Canada, all key government services have become fully online
since 2004. In China, 80 percent of the administrative services of the municipal government agencies
are being delivered via the Internet since 2005.
In India, the e-Governance initiatives are broadly managed under the umbrella of the National eGovernance plan (NeGP). MCA 21 is envisioned to provide anytime and anywhere services to
businesses. It is a pioneering program in the field of e-governance in the country. It is a Service
Oriented Approach in the design and delivery of government services to establish a healthy business
ecosystem and make the country globally competitive. It has ushered in global best practices that are
based on experiences drawn from Australia, Canada, New Zealand, the United Kingdom and
Singapore. The MCA 21 project was implemented as part of the MCA's vision: "To be a leader and
partner in initiatives for Corporate Reforms, Good Governance and Enlightened Regulation, with a
view to promote and facilitate effective corporate functioning and investor protection."
E-governance is a highly complex process requiring provision of hardware, software, networking and
reengineering of the procedures for better delivery of services. It includes broad range of services for
almost all segments of the society. The most common areas of e-governance application are ecommerce, business regulation, taxation and revenue, law enforcement, education, health and
transport. The business community benefits because e-governance can become a catalyst and a channel
for e-business, as it has been observed in developed countries like the US, UK, Canada, Australia and
Singapore. Hereunder, we highlight the benefits of e-governance to various business entities:
E-governance empowers users through access and use of information. It necessitates the online
facilitation of documents and corporate information which reduces the possibility of
subsequent alteration of figures and information. This promotes investor protection as the
investors are not exposed to disingenuous information.
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E-governance paves way for a convenient and cost-effective system for businesses. It helps in
building up of a centralized database repository of corporate information and the various
interested parties benefits by getting easy access to the most current information without
having to spend time, energy and money.
Inspection of public documents of companies by the various external statutory authorities like
tax officials, auditors, etc. is made possible through e-governance. This, in turn, aids in better
and timely tax disbursement, better administration and compliance of statutory
pronouncements. Further, it reduces redundancy and duplication in government work.
E-governance facilitates total transparency thereby promoting enhanced service level, delivery
mechanism and customer-relationship management.
Decision making is expedited, and the interface between government and business as well as
government and citizens is enhanced. The citizens are benefitted as transparency, efficiency
and integrity is promoted.
E-governance is, thus, of vital importance to the national economy as it facilitates better governance of
both the government as well as the business sector, thereby aiding various interested parties and
investors in their decision-making process and the statutory authorities in their regulating and
administrating process. Hence, an attempt has been made in this article to bring into focus the
mechanism of achieving good governance of corporate entities, its financial resources and its business
objectives through the application of information technology driven language called XBRL.
XBRL as a Financial Reporting Language
The beginning of XBRL can be traced to the initial efforts of Charles Hoffman, a Certified Public
Accountant, from Tacoma, Washington. The American Institute of Certified Public Accountants
(AICPA) was also instrumental in the formulation of XBRL International Inc (XII), which is a
consortium of regulators, financial standards bodies and technology providers.
XBRL is an open, royalty-free software specification developed through a process of collaboration
between accountants and technologists from all over the world. It is a digital language that was
developed to provide a common, electronic format for business and financial reporting. It offers major
benefits to all those who have to create, transmit, use or analyse such information. In XBRL, mark-up
tags are used to make business information computer-readable. It is intended to standardise financial
reporting in order to promote transparency and to improve the quality and comparability of business
information. It is based on eXtensible Mark-up Language (XML) by which both the contents and
relationship can be easily established between the users and providers of financial information. Instead
of treating financial information as a block of text or numeric items, XBRL attaches a unique
electronically readable tag for each individual financial term. It is not just content but also the context
that is being transmitted through XBRL.
An XBRL document comprises of the taxonomy and the instance document. An XBRL instance
document contains primarily the business facts being reported, and taxonomies refer to an electronic
dictionary of the reporting concepts and consist of all the data definitions, the basic XBRL properties
and the interrelationships amongst the concepts. In other words, taxonomy contains description and
classification of business and financial terms, while the instance document is made up of the actual
facts and figures.
Regulators of stock exchanges and securities, banking regulators, business registrars, revenue
reporting and tax-filing agencies and national statistical agencies all over the world employ XBRL for
their information dissemination purposes. Therefore, taxonomies have to be in sync with the global
taxonomy as recognized by XBRL International. The responsibilities of forming XBRL national
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XBRL helps in cost control, reduction and cost management. Preparation of cost sheet,
payment scheduling, inventory classification, cost apportionment, cost allocation, cost audit
and cost compliance report is facilitated by it. Once the format is designed and preserved, it
can be updated anytime according to the necessity of the management;
Accounting for foreign exchange transaction, foreign exchange translations, foreign exchange
exposure risk, transaction loss, etc. can be formatted in drill down format through the use of
XBRL;
Using hyperlinks in XBRL formatted documents, a user can derive financial information, key
financial tables and standardized financial information, including footnotes and relevant
financial ratios;
Automatic import of Master Data of company via Corporate Identity Number (CIN) and
Director via Director Identification Number (DIN), one time creation of Product Master and
Product detail is facilitated by XBRL;
XBRL has in-built validations to prevent errors. Besides, it provides for the generation or
automatic validation of cost instance document for submission to MCA;
Information pertaining to extent of priority sector lending, number of no-frills account opened,
classification of non-performing assets, capital adequacy ratios spread in respect of interest
rate differential, assessment of credit risk may also be established through XBRL in respect of
a banking institution;
XBRL tag can be beneficially applied by insurers in respect of insurance and risk
management. Existence of over-insurance, under-insurance, partial coverage of risk in respect
of employees and operations of an entity can be ascertained with XBRL.
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