Chairman Schapiro Setting Wishy-Washy Standards? Is the SEC Nothing but 'Those Letters'?

[Miles P. Jennings, Jr.]

I wonder how U. S. banks and other lenders would feel if their stretched-out mortgagors viewed the timely repayment of interest and principal the way the Chairman of the Securities and Exchange Commission apparently regards the legally mandated compliance schedule for SEC-filing companies to report in XBRL. She is quoted as saying, regarding companies' meeting XBRL compliance phase-in schedule, "I don't mean to be dismissive of it in any way---it's just not one of my highest priorities." ["SEC's Schapiro shows little interest in Cox's pet projects" by Martin Howell. 4/28/09]

U. S. SEC mandated reporting standards should carry more weight than in the "lite" language couched in double-negative legalese used by Schapiro. She should have simply affirmed the law and said that any non-compliance will be reviewed on a case-by-case basis consistent with the rule's temporary hardship exemption provisions. Just like taxpayers' meeting their April 15th filing date, corporate filers can seek and file for an extension if there are extraordinary reasons for their failure to comply with the SEC reporting standards on a timely basis.

Her casual follow-on comments, quoted in the above article, that "I've only given, I think, three speeches and I don't think those letters [XBRL] have slipped into any of them." Is it lost on Schapiro that there has been about a decade of careful examination, review, testing, public comment, and open SEC hearings regarding XBRL and the need for enhanced transparency in U. S. reporting standards? Is the Chairman of the SEC reducing the now-mandated U. S. Reporting Standard to "those letters?"

At least one would expect U. S. corporations to strictly adhere to legally mandated accounting standards. However, the recent Grant Thornton survey [See "Two-thirds of public companies have no plans to use XBRL---despite... suggests that corporations might well think of the SEC as nothing but "those letters." Maybe what the senior comptrollers surveyed are saying is that, "Well, y'know, of course the SEC is important...whatever...but those letters just haven't slipped into our Audit Committee's discussions."

Hopefully, "Part III Securities andExchange Commission 17 CFR Parts 229, 230, ... is on Chairman Schapiro's summer reading list....it's only 45 pages after all.

[Kurt Cagle]

Schapiro's dealing with some serious fires at the moment, not least of which being actually rebuilding the SEC from the ground up (or at least the admin down) and handling more than her fair share of the continued fallout from the current credit crisis, so I'd be careful not to read too much into this.

However, having said that, I also think that it would be worthwhile for XBRL.org to put together an open letter (and overview document) about XBRL. The fact that it was Cox's "pet project" means that Schapiro and others may very well be inclined to dismiss it as being a partisan waste of time, so having a better brief of what the technology is and why it's important should be critical to convince those who otherwise are going to see it as "partisan baggage".

[Miles P. Jennings, Jr.]

No doubt as to her current challenges---but any "rebuilding of the SEC" should highlight the EDGAR system as the core building block for an information database.

Maybe with stronger public statements re XBRL the cited survey would not have shown such lack of both corporate diligence and planned compliance.