Andy Lymer, The University of Birmingham, .email@example.com.
The subject of on-line provision of company financial
information has already taken up one of these columns this year.
Column 1 was dedicated to the on-going EDGAR (Electronic Data
Gathering and Retrieval) project of the SEC (see ACCOUNT Spring
1995). However, this area is moving forward so quickly it did
not seem inappropriate to dedicate another, albeit more general,
column to this subject.
The EDGAR project has been in the news again because
the SEC have taken over direct responsibility for the provision
on the Internet of company filings they received. As mentioned
in column 1, the two year experimental project supported by the
SEC, but actually run by Internet Multicasting Services and New
York University, came to the end of its funding in September.
There was significant debate and lobbying from various interested
parties in the US about how, or even if, the project should be
progressed. From the 'value-added' service providers there was
clear, and understandable, pressure to encourage the SEC to consider
using their not inappropriate experience in the area of commercial
information provision and develop the project in their direction.
However, the 'keep public information public and free' lobby won
the day, and, at least for the time-being, a new home for EDGAR
was created that is still on the Internet (http://www.sec.gov/).
The SEC reported in making this announcement that the previous
addresses for the database would continue to point to the developing
system and would therefore continue to be valid points of entry
to the database. The SEC also promised further development work
on making their data sets more readily available and more 'user-friendly'.
They have declared support for the project in this form into the
future (see Steven Wallman's comments - an SEC commissioner -
in Accounting Horizons, September 1995).
Alongside this action by the SEC has been a huge
growth in the number of US based companies supplying financial
information about themselves on the Internet. An excellent source
of information on who is doing what in this area can be found
at the National Corporate Services web pages (http://www.csn.net/natcorp/traded.html)
where links into a number of lists of 'company information on-line'
can be found. A particularly good list available from this site
is that maintained by InvestorWeb (http://www.investorweb.com/company.htm)who
categorise companies according to the amount of investor information
they give on-line (though avoid declaring explicitly what they
consider to be investor information and what they don't !). These
lists are growing daily as companies come on-line.
A glance through this data will however, reveal very
few companies reporting information under the UK's regulatory
structure (take a look at the SUMMA pages for details on the few
that do - http://www.icaew.org.uk/). Does this mean that the UK
is trailing further and further behind developments in this area
? Fortunately not ! As reported in Accountancy Age on 28th September,
Companies House are now seriously considering the advantages that
could accrue to them by offering (or maybe requiring) companies
to file their annual returns and other documents electronically
in a way similar to the model the SEC is developing in the USA.
Their considerations are just that at present - they haven't developed
far enough yet even for Companies House to be prepred to issue
a public statement describing what areas they might be
considering ! However, this move indicates a serious intent by
our primary financial information collecting agency to 'move with
Also in the last two months, the Inland Revenue have
issued a second consultative document on their proposed introduction
of the Electronic Lodgement System which is planned to coincide
with the introduction of Self-Assessment in 1997. This document
reports the successful completion of the pilot feasibility study
and handles a number of practical problems that the study, and
others comments, have generated.
Why is all this relevant to the subject of on-line
corporate reporting ? Whilst not empirically proved as yet, it
is fairly likely that the pre-emptive move by the SEC to encourage
(require) electronic filings of accounting reports has encouraged
companies to consider the production of their own investor information.
The advantages of doing this from a company's perspective are
clear. For example, they can make information widely available
about their business at a low marginal cost and they can structure
the information in a flexible way to allow mining from data provided
to be governed by the information user not solely the information
provider (as is obviously the case with standard reports). This
flexibility opens up interesting possibilities in areas such as
dynamic information provision (such as the use of video and audio
alongside the conventional text based information), the advanced
use of interactive feedback and in other areas such as timely
The advantages of on-line reporting from the users
perspective follow on from this more open provision of information
and the flexibility it offers to them to be selective in how and
when they take information from businesses they are interested
If Companies House and the Inland Revenue make moves
in the UK similar to those in the US then it is possible that
companies reporting in the UK will follow the precedent set by
their US based counterparts. They may well take more notice of
how they can add their own value to the information that they
are required to prepare and submit electronically. If this proves
to be the case then a number of interesting issues for accountants
and standard setters will arise: how, when and if this information
should be independently assessed in an audit, to what standards
should this information be produced, if any, can this process
replace existing forms of statutory reporting over time, and so
on. There are a number of issues here that need to be fllowed
up with relevant research.
Time will tell whether or not Companies House will opt to make the information they collect available to all on-line as the SEC has done. It is likely that such issues as Crown Copyright, that currently restricts the possibilities of distributing UK legislation and other public documents electronically, will have to be dealy with before there would be significant pressure and precedent for this to be the case in the UK. The 'added value' lobby is also at least as strong in the UK as it is in the US. However, we can always live in hope !
It is likely that some of the details given in the article will become dated over time.
Please notify the author (firstname.lastname@example.org) if you spot any of these changes and he will update the information where appropriate.
This page was created and is maintained by its author - Andrew Lymer: University of Birmingham.
Last amended: November 1996