SMITHFIELD – The nation’s investment banking crisis may have been lessened, and perhaps even avoided, if the United States had laws requiring the widespread use of Standard Business Reporting (SBR), according to Bryant University accounting professor Saeed Roohani.
Roohani said SBR’s reliance on XBRL – a computer code that allows executives, analysts, regulators and investors to quickly delve into financial statements and make instant spreadsheet comparisons instead of having to pore over lengthy reports and prospectuses – could have helped sound the warning bells earlier.
If businesses in the United States had been required to use SBR, “there would have been little room for mystery about the types of portfolios and derived financial instruments that recently failed institutions were holding,” said Roohani, a leading expert on XBRL education. “Alarms would have been sounded long before reaching a crisis. The government and stockholders could have taken preventive action.”
Roohani is conducting research on the effect of SBR and XBRL on corporate governance, monitoring and transparency. The governments of Netherlands and Australia require SBR to be used at all levels of business, and other countries are considering similar approaches.
Roohani is the PricewaterhouseCoopers XBRL Fellow at Bryant University, and he has served as a consultant to the Financial Accounting Foundation and the SEC US GAAP Taxonomy project.
