Parliament The Portfolio Committee on Trade and Industry wishes to congratulate the Companies and Intellectual Property Commission (CIPC) on the launch of its digital financial reporting system which will cut red tape significantly.
Committee Chairperson, Ms Joanmariae Fubbs, said regulatory compliance is essential as it is part of good corporate governance and the Digital Financial Reporting Solution takes South Africa right into the Fourth Industrial Revolution.
The Minister of Trade and Industry, Dr Rob Davies, launched the Extensible Business Reporting Language (XBRL), a Digital Financial Reporting Solution at the Johannesburg Stock Exchange (JSE) in Sandton, yesterday.
The system will allow companies to file annual financial statements using this mechanism and the data could be shared across the regulatory spectrum for multiple purposes. Secondly, the XBRL will align the submission of financial statements with that of the global reporting standards for businesses. According to Minister Davies, the XBRL uses best practice technology in electronic communication of business information.
Recently, the committee conducted a study visit to Germany where it reached a better understanding of the Fourth Industrial Revolution and appreciated its capacity to manage the application of large amounts of data, where technologies can be applied in various ways across all forms of production and service activities as well. South Africa is very fortunate that Minister Rob Davies is leading the way for the country to use 4IR solutions with data that will ease the administrative burden of regulatory compliance for business.
The launch of this digital solution will enable businesses and companies to cut the time in the preparation and analysis of data as it simplifies the process. The XBRL will also contribute positively to the communication of annual financial statements, and is a significant milestone in absolute connectivity between all DTI entities and others within the public and private sectors.
In its oversight over the DTI, the committee interrogates the integrity of financial reporting mechanisms in the CIPC, including other agencies, as the CIPC plays a pivotal role in the financial architecture of government. Hence transparency, efficiency and security, as well as regulatory compliance across the financial, business and industrial spectrum is critical. This Digital Financial Reporting Solution will support the work of the CIPC as it interfaces with the capital markets by assisting analysts, financial and security regulators, business registrars, tax authorities and other users to access relevant facts, said Ms Fubbs.
What is very constructive and should expedite the roll out of the XBRL, is the decision of the CIPC Commissioner, Adv Rory Voller, to conduct a six-week pilot programme with 100 companies to test the system. We also welcome the system because it is expected to reduce the burden of multiple submissions by different regulators which posed serious operational challenges to the CIPC. The filing of financial statements to the CIPC in XBRL format with the annual returns becomes mandatory from 1 July 2018 for companies meeting the audit threshold.
Source: Parliament of the Republic of South Africa