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US financial regulators use no technology

How to fight 21st century financial crime with 19th century tools

A US House of Representatives committee is investigating whether federal securities regulators are using last century's tools to review corporations' books. House Oversight Committee Chairman Darrell Issa penned a stiff missive to Securities and Exchange Commission Chair Mary Jo White asking for an explanation of why the regulator has been so slow to embrace the use of eXtensible Business Reporting Language, or XBRL.

White has been wanting more funds to hire additional staff but apparently is less interested in moving to XBRL. Issa pointed out that interactive data in financial reporting offers the opportunity for increased speed, accuracy and usability through automation. While the SEC's is aware of interactive data's potential, it is surprising that it has not yet integrated interactive data into its internal review processes to improve efficiency or reduce costs, Issa wrote. Instead the regulator was relying on "printouts, pencils and calculators".

In 2008, the SEC adopted a rule mandating companies and mutual funds submit XBRL versions of their financial statements in addition to routine text format. The open-standard software labels financial statements with computer-readable tags that can be read like barcodes to help investors more easily find and compare information about companies.

But a Republican committee aide said former SEC staffers told the panel that the commission fails to utilize the information it gets and instead resorts to pencils and calculators.

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