CPA Magazine Blogs

The XBRL Tag-Team

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Created on Tuesday, 14 May 2013 14:16

Written by Craig Clay

With the expiration of the SEC’s limited liability provision for XBRL data submissions, an increasing number of public companies are deciding to take the XBRL tagging process in-house.  Insourcing XBRL provides an issuer more control, helping to overcome the longer turn times associated with a completely outsourced XBRL process.  However, a lack of internal expertise around XBRL can introduce additional enterprise risk.

As with any new reporting requirement, the SEC will continue to refine the XBRL rule over time.  At a minimum, new taxonomies will continue to be released as the XBRL data set grows. While professional XBRL providers closely watch these developments, many issuers lack the resources to keep up to date on rule changes that may impact their filings. As a result, many public companies see a benefit in a tag-team approach to XBRL, a hybrid solution that provides the flexibility and control of insourcing with the knowledge base and service level provided by outsourcing. In order to use this approach to produce high-quality XBRL data, experts suggest following some key process steps:

Educate and teach.

The first step should be to ask what resources you have at your disposal. Has one of your accountants been through the process before? Is there a peer who can help get you started? What do you need to create a resource library?

Once you know what you have and what you need, educate yourself and your accounting staff in the use of XBRL and assign a person to monitor and flag any changes in technologies and reporting requirements. The world of XBRL is ever-changing. Once your initial education is complete, develop training materials to bring future employees up to speed.

Develop a formal XBRL policy.

Do you have a formal policy in place? If not, do you know what should be included?

Use a third-party-created XBRL exhibit as a starting point, and consider how much time you’ll need to finish any last-minute tagging or make any changes. Once you’ve developed, documented and formalized a policy, it should have basic, repeatable elements, such as: plan, map, review, test and file. The SEC recommends incorporating this plan into existing disclosure controls and procedures.

Select a high-quality XBRL creation tool.

Before selecting an XBRL creation tool, there are a few questions you’ll want to ask yourself:

• What functionality and features do I need?
• What is my budget?
• What is my level of commitment – for time and education – to create XBRL-formatted filings?

The right tool can streamline the entire tagging process. At a minimum, this tool should support all four levels of tagging, enable workflow management, facilitate element review, provide useable renderings, and permit repeatable processes. Of course, trust in the vendor and product cannot be underscored enough.

Watch for signs of risk or errors.

Despite best efforts, errors do persist. The XBRL Consistency Suite found that more than 60 percent of all tagging errors can be attributed to two factors: amounts tagged backward (34.6 percent) and invalid axis/member combinations (26.3 percent). Preventing these kinds of errors is one of the biggest challenges when moving operations in-house. These data are publicly available, so it is critical to monitor and maintain data quality. Errors can be avoided by creating a risk assessment template to identify and mitigate risk, and by validating XBRL files often to correct errors as they arise. One of the easiest ways to do this is to compare your filings with those of your peers in order to determine which areas are ripe for improvement.

Craig Clay is executive vice president, Global Capital Markets at RR Donnelley

Brooks Malone Participates in the Cherokee-McDonough Challenge

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Created on Monday, 13 May 2013 15:27

Written by Brian Van Norman

Hughes Pittman & Gupton, LLP, a Triangle-based CPA firm serving the financial management needs of local, multi-state and international businesses, as well as their owners, announces today Partner Brooks Malone is serving on the Advisory Committee for the Cherokee-McDonough Challenge.The start-up competition is a business accelerator designed to identify, fund and develop early-stage, high-impact environmental start-ups. It is an opportunity for environmental entrepreneurs to receive a seed investment of $20,000, as well as three months of free office space, back office support and advice from experienced entrepreneurs and investors.

"There are a variety of accounting considerations that go into proper management of environmental companies that differ from traditional business concerns including compliance issues and tax incentives," says Malone. "HPG has a dedicated team of accountants that specialize in clean and green companies. Our participation with these start-ups will help them maneuver through some of the governmental concerns that may affect business growth."

Malone co-leads the HPG Knowledge-Based Industries practice group, working with investor-backed companies in the technology sectors. A 23-year veteran of public accounting, he joined HPG in 1990 and was named partner in 1997.

About Hughes Pittman & Gupton, LLP (HPG):
Celebrating its 30th year, HPG is a triangle-based CPA firm serving the financial management needs of local, multi-state and international businesses, as well as their owners. More than just an accounting firm, HPG assists clients in looking beyond the bottom linesm by being the right people, right value and right firmsm to achieve each client's definition of success. HPG is a member of CPAmerica International and an affiliate member of the Crowe Horwath International alliances of CPA firms. The firm leverages this to provide national and global accounting resources to its clients. The firm has developed specialized teams of accounting, audit, tax and management advisory CPAs to address the unique needs of owner-managed, investor-backed, and privately held companies that include:

Manufacturing and distribution businessesTechnology and life science organizationsHealthcare services and providersReal estate development (architect, engineering, construction and property management firms)Retailers and consumer services providers

In addition, HPG offers ERISA and Sarbanes-Oxley audit services and provides family wealthcare services for business owners, executives and multi-generational wealth families.

HPG has remained committed to advancing a thriving Triangle community since its founding in 1983. Focusing on the Triple-P approach (People, Profit, Planet) to sustainability, the firm has received recognition and accolades for its efforts including:

Recognition by the Triangle Business Journal as one of the largest CPA firms headquartered and staffed in the Research Triangle Park region of North CarolinaRecognition as one of the top 100 Best Accounting Firms to Work For in the country by Accounting TodayRecipient of the 2009 Large Entrepreneurial Business Award by the Greater Raleigh Chamber of CommerceRecipient of the 2010 Integrity in Business Award by the Greater Raleigh Chamber of CommerceBeing the first accounting firm in the world to earn Green Plus certification by the Institute for Sustainable Development

For more information, visit www.hpg.com.

RTP CFO Forum Focuses on Multi-State Tax Compliance in June

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Created on Monday, 13 May 2013 13:57

Written by Brian Van Norman

The RTP CFO Forum (www.rtpcfos.com) will hold its next monthly meeting on Friday, June 7, 2013. The organization serves as a peer-to-peer networking opportunity for more than 200 senior financial executives in the Triangle area to discuss topics of interest. The featured speaker will be attorney L. Neill Edwards of Womble Carlyle. He will discuss nexus and multi-state tax compliance. For taxation purposes, nexus is a link between a company and a territory governed by a taxing authority.

"In a world where employees live and work remotely, various business functions are outsourced and sales transactions occur over the web; many companies are not aware of their potential tax liabilities in other states, which is referred to as nexus in the legal and financial worlds, " says Will Eglin, CFO of IEM and RTP CFO Forum board member. "A failure to properly identify and comply with the tax laws in each state that a business has nexus not only opens the door to fines and interest payments, but can affect eligibility for government contracts or grants."

Edwards has more than two decades of experience in multistate and local tax planning, controversy, and related regulatory work on a national level, as well as in multistate economic development matters. This experience covers all fifty states, and virtually all categories of taxes and related state regulatory imposts. In addition to more traditional C corporation, S corporation, LLC, and individual tax work, he has amassed tax planning and controversy experience with various hybrid entities, such as REITs, REMICs, SMLLCs, Series LLCs, QSubs, holding companies and special purpose entities.

The RTP CFO Forum meets the first Friday of every month, from 7:30 a.m. - 9:00 a.m., at the Hughes Pittman & Gupton, LLP office in Raleigh. Membership in the forum is free, limited to CFOs and by invitation only. To request to join the group, please email This email address is being protected from spambots. You need JavaScript enabled to view it. .

About RTP CFO Forum:
The RTP CFO Forum serves the greater Raleigh, Durham and Chapel Hill region, supporting more than 200 senior financial executives. The forum is designed to provide interactive networking and discussion of technical and strategic topics in an environment created exclusively for senior-level peers. CPE is provided on select topics. To learn more, visit www.rtpcfos.com.

HPG Sponsors Triangle Startup Factory

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Created on Monday, 06 May 2013 18:18

Written by Brian Van Norman

Hughes Pittman & Gupton, LLP, a Triangle-based CPA firm serving the financial management needs of local, multi-state and international businesses, as well as their owners, announces its sponsorship of the Triangle Startup Factory of Durham. Program support continues the commitment by firm partners to high-growth companies."We are very appreciative to have HPG join the sponsorship group for Triangle Startup Factory," says Dave Neal, managing director, Triangle Startup Factory. "We have worked with the HPG team in many situations over the years with entrepreneurial companies and look forward to continuing that through this relationship."

Through the Triangle Startup Factory, early-stage companies receive $50,000 in seed capital as well as office space and hands-on mentoring. The 12-week program helps the budding entrepreneur build a minimum viable product, identify the right customers, and validate market. After successful completion of the program, participating companies are eligible for additional funding, up to $150,000.

"Programs like the Triangle Start-Up Factory are important to providing economic growth and stability in N.C.," says Brooks Malone, partner, HPG. "The HPG team has extensive experience working with bootstrapped and venture-backed technology companies with a practical, hands-on approach to help them grow."

As a locally owned and managed firm, HPG has assisted national companies in establishing operations in N.C. and N.C. businesses in expanding to become national and international enterprises. With a unique understanding of the taxation, accounting and financial management needs of privately held and family-owned businesses, HPG accountants have guided the growth of manufacturers, retail and service businesses as well as technology companies from startup to ownership transition, be it IPO, next generation ownership or sale to employees or other investors.

About Hughes Pittman & Gupton, LLP (HPG):
Celebrating its 30th year, HPG is a Triangle-based CPA firm serving the financial management needs of local, multi-state and international businesses, as well as their owners. More than just an accounting firm, HPG assists clients in looking beyond the bottom linesm by being the right people, right value and right firmsm to achieve each client's definition of success. HPG is a member of CPAmerica International and an affiliate member of the Crowe Horwath International alliances of CPA firms. The firm leverages this to provide national and global accounting resources to its clients. The firm has developed specialized teams of accounting, audit, tax and management advisory CPAs to address the unique needs of owner-managed, investor-backed, and privately held companies that include:

Manufacturing and distribution businessesTechnology and life science organizationsHealthcare services and providersReal estate development (architect, engineering, construction and property management firms)Retailers and consumer services providers

In addition, HPG offers ERISA and Sarbanes-Oxley audit services and provides family wealthcare services for business owners, executives and multi-generational wealth families.

HPG has remained committed to advancing a thriving Triangle community since its founding in 1983. Focusing on the Triple-P approach (People, Profit, Planet) to sustainability, the firm has received recognition and accolades for its efforts including:

Recognition by the Triangle Business Journal as one of the largest CPA firms headquartered and staffed in the Research Triangle Park region of North CarolinaRecognition as one of the top 100 Best Accounting Firms to Work For in the country by Accounting TodayRecipient of the 2009 Large Entrepreneurial Business Award by the Greater Raleigh Chamber of CommerceRecipient of the 2010 Integrity in Business Award by the Greater Raleigh Chamber of CommerceBeing the first accounting firm in the world to earn Green Plus certification by the Institute for Sustainable Development

For more information, visit www.hpg.com.