Amsterdam Business School
The release of the ‘Referentie GrootboekSchema’ in the
Netherlands
Name: Dersim Yildirim
Student number: 10468161
Date: 14th of August, 2015 Word count: 23196
Supervisor: Drs. E.H. Jansen Placement supervisor: J. Nijboer MSc.
MSc Accountancy & Control, specialization Control
Statement of Originality
This document is written by student ‘Dersim Yildirim’ who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Abstract
This thesis is about the currently released ‘Referentie GrootboekSchema’ in the Netherlands and the anticipated impact of the release of this schedule on certain accounting aspects in the wide sense. At first this paper provides theoretical background information about financial reporting and its digitalization, then it describes what RGS is and the motivation behind its development. The main object of the research is to explore whether RGS provides a solution to the problem that within the chain of financial reporting there are different chart of accounts used in the digital exchange of financial data. This research is done in a threefold of methods these are theoretical research, a survey and interviews done in the sector of Finance and IT. One of the main variables that is researched is the impact on quality of the exchange of financial
information. In which quality is subdivided in understandability, fitting information policy, efficacy and reliability. The other two variables are the expected impact of RGS on consolidation and benchmarking processes. The results are interpreted with statistical analysis and placed in the right context by means of the incurred interviews. The hypothesis that weren’t rejected were related to the reliability, consolidation and benchmarking variables. This means that a majority of the surveyed professionals expect that the RGS improves possibilities that are concerned with these variables.
Content
1 Introduction ... 6
2 Problem description ... 8
2.1 Origination ... 8
2.2 Problemization ... 8
2.3 Motivation of the research ... 9
2.4 Link with the theory ... 9
2.5 Definition of key terms ... 10
3 Research question ... 12 3.1 Research question ... 12 4 Theory ... 14 4.1 Standardization ... 14 4.2 RGS and consolidation ... 18 4.3 RGS and benchmarking ... 20 4.4 Agency theory ... 21 5 Financial Reporting... 22 5.1 Financial Reporting ... 22 5.2 XBRL ... 29 5.3 RGS ... 31 5.3.1 History of RGS ... 31 5.3.2 Description of RGS ... 33 5.3.3 The structure of RGS ... 34 6 Research method... 36 6.1 Hypothesis ... 36 6.2 Research Methodology ... 38
7 Statistical findings & interpretations ... 40
7.2 General Statistics ... 40
7.3 One sample test ... 41
7.4 Findings ... 43 7.5 Interpretations ... 45 7.6 Other statistics ... 50 8 Conclusion ... 52 9 Recommendations ... 54 10 Acknowledgements ... 55 11 Literature ... 56 12 Appendixes ... 59
12.1 Appendix 1 (Finan mappingtool) ... 59
12.2 Appendix 2 (Finan mappingtool) ... 60
12.3 Appendix 3: Interviews ... 61
1 Introduction
In the last 15 years various entities have taken steps to implement XBRL in the Netherlands. Till this day however most of the entrepreneurs don’t use XBRL in the Netherlands, even though it was said that XBRL would bring many advantages. More recently RGS has been released in the Netherlands and this schedule might provide resolution. The main topic of this paper therefor is the recently released ‘’Referentie GrootboekSchema’’ (RGS) in the Netherlands. This is a standardized Reference Ledger Schedule developed to enhance the use of XBRL. At first this paper gives some background information about financial reporting and its digitalization, then it describes what RGS is and the motivation behind its development. The main object of the research is to explore whether RGS provides a solution to the problem that within the chain of financial reporting there are different chart of accounts used in the digital exchange of financial data. The research question that logically arises from this is the following:
“To what extent does RGS provide a solution to the problem that different chart of accounts are used for the exchange of financial data?”
This can be investigated by determining the quality of the information which is exchanged with the aid of the RGS. Starreveld has prepared a model in 1994, which describes what the most important factors are of high-quality data. It is possible to measure the opinion of professionals in this field. So we can analyze to what extent the data meets these requirements after it has been converted using the RGS. The four most important aspects of the quality model are ‘understandability’, ‘fitting the current information policy’, ‘efficacy in a broad sense’ and the ‘reliability’. Whereby the efficiency has a number of in depth levels. Based on these different aspects I have added four research questions that should underpin the main question.
Is there a positive association between the implementation of RGS and the understandability of exchanged financial data?
Is there a positive association between the implementation of RGS and current information policies?
Is there a positive association between the implementation of RGS and the efficacy of exchanged financial data?
Is there a positive association between the implementation of RGS and the reliability of exchanged financial data?
Is there a positive association between the implementation of RGS and consolidation processes?
Is there a positive association between the implementation of RGS and benchmark opportunities?
At the time writing this paper there was no available scientific literature available on RGS, therefor this paper will be a contribution to the current scientific knowledge. In addition, the implementation of RGS may lead to more standardization of the financial discipline (both for controllers and accountants). As has been seen in more areas within society automation is making activities more efficient and effective. By using standard ledger accounts in the financial software of different companies standardization will arise. This could lead to improved quality of the exchange of financial data between companies (Westra, 2014). Because there will be less converting actions necessary to interpret the used accounts. By standardizing on a large scale benchmarking might be more feasible (Ipenburg, 2015). Other complementary effects may be a gain in possibilities of e-invoicing (Bottemanne et al., 2015) and improved consolidation processes (Jansen, 2015). To research the possibilities of RGS on the consolidation process of lager entities was an idea of my supervisor.
The way the research is executed is in threefold, at first a literature study was done. This research was done to find out all about the ins and outs of the subject. Their also have been deliberations between the researcher and his colleagues and supervisors. Subsequently, the research is done by surveys within the field of accountants and software vendors who are familiar with RGS. Especially people who have worked with XBRL can give a good insight in whether the implementation of RGS provides the desired effects or not. By using a Likert scale in the survey it should be possible to draw a conclusion of whether the enhancements per variable are significant in their opinion or not. This is done with statistical analysis. Furthermore, there are interviews executed within the same occupational group. These interviews are used to place the findings of the qualitative research in the right context. These results will give us further insight in the possible impact of this reference ledger schedule.
2 Problem description
2.1 OriginationAt the introduction of the SBR program in the Netherlands it was said that the use XBRL will provide many opportunities. Reasons for using XBRL are given in a PowerPoint presentation by XBRL Nederland (2008). Some of these motivations are summed:
many reports are compiled manually, banks processes many reports (manually),
organizations have (depending on their size) several mandatory reports, most companies use spreadsheets for their reporting,
Spreadsheets often contain errors by their own interpretation of meaning of data.
The SBR program was said to provide solutions for these vulnerabilities. Despite its many advantages SBR is not widely accepted within the SME of the Netherlands. Reasons given are the costs to implement and use it, the complexity and the size of the company (Lekkerkerk, 2011). In addition companies seem to be afraid of change, especially if their current reporting processes are working properly (Ahrerndt, 2009). In addition there doesn’t seem to be a lot off awareness of the SBR program in the Netherlands. Research done by Melse and Weltevreden (2013) states that, even though SBR is a mandatory method for filing the corporate tax returns and IB since 1 January 2013, 80 percent of companies surveyed (at that time) had never heard of SBR. However, one could argue that if there were only advantages to the use of SBR for the entrepreneurs they would’ve be aware of it by now.
2.2 Problemization
Specifically, the complexity and costs that derive of participating in SBR partly exist because each company is, to a certain degree, free to use their own account numbers. This means that the codes (account numbers) that contain the financial data differ from one another. These different codes at the resource side have to be linked with XBRL (as target) for the output of data for financial reporting. These conditions require that tailoring is necessary for creating a link between the ledger of a company and the various XBRL structures. Most entrepreneurs don’t spend too much of their time and money at these complexities and therefor choose to maintain their current way of financial reporting. Hiring an agency that will provide in these complexities is often expensive, time consuming and because of uncertainties it doesn’t seem to be the first choice of companies. The conclusion has to be that the current benefits of using XBRL don’t seem to outweigh the disadvantages for the entrepreneurs.
2.3 Motivation of the research
RGS might provide a solution to a part of this problem, by standardizing the different charts of accounts of companies at the resource side more efficiency might be obtained to connect the general ledger with XBRL. The entrepreneurs won’t have to put too much afford in it, because every account number will be connected to RGS within the ERP-system. This is a onetime connection, because every new account number within a group will automatically be connected to the right reference number of RGS. The requesting parties can annually generate a mapping between RGS and the used taxonomies. This way RGS might bring XBRL closer by the entrepreneurs because of its accessibility. An indicator that could imply that, the use of a standardized chart of accounts could enhance the use of XBRL, can be derived by looking at Belgium. In Belgium it is customary to transmit annual figures through XBRL (Bottemanne, 2012). And a normalized chart of accounts is used in Belgium (Jorissen, 2009). This chart of accounts is mandatory by Belgian law.
2.4 Link with the theory
To affirm that successful standardization is realized, consistency in the quality of the data exchanged through RGS is necessary. This way one translation in the chain of data exchange will probably be optimized. The quality is an essential aspect of the standardization because the implementation won’t be accepted if the quality will deteriorate. The research that will be described in this thesis focusses on the possible qualitative advantages of implementing RGS in the Netherlands, not the overarching (political) ones. At chapter 4 we will further elaborate on this subject by the use of the quality model of Starreveld et al.
2.5 Definition of key terms
At this subsection brief descriptions are given of the key terms which are essential for understanding the thesis. Further on in the thesis these terms will be elaborated in more detail.
RGS
The Reference ledger (RGS) is a uniform (ledger) chart of accounts. Its main function is to simplify reporting from the financial administration. The latter is achieved, in practice, on one hand by linking existing (ledger) account schedules to RGS. And on the other hand by constructing reports based on the data obtained from RGS (Bottemanne, 2015).
SBR
SBR is a method to assemble and deliver digital standardized financial reports. SBR is used by the Dutch tax authorities, the Chamber of Commerce and the CBS as the way of reporting data. Various banks receive credit reports in SBR. SBR uses XBRL as underlying language (Logius, 2012).
XBRL
XBRL specifications describe, in a generic way how XML can be used for reporting financial facts. XBRL (eXtensible Business Reporting Language) is a code language saved in XML file format (Daas et. al, 2008). Currently modeling rules are developed by XBRL International for Financial Reporting (XBRL FR) and Global Ledger (XBRL GL). There is a distinction between XBRL Financial Reporting (FR), where the data are converted to the XBRL at the end of the chain at the moment of reporting and XBRL Global Ledger (GL), where the data is already provided with a label at the primary recording (XBRL Nederland, 2008).
Taxonomy
The financial structure of different company legal forms is specified in the taxonomy. The taxonomy is written in XBRL and saved as an XML file. Depending on the requesting company the Dutch ‘Banken Taxonomy’ (BT) or the ‘Nederlandse Taxonomy’ (NT) is used. The BT is used by the Dutch banking industry and the NT is used by the Dutch governmental entities like CBS, KvK, and the tax authorities.
IFRS Taxonomy
The IFRS taxonomy is based on XBRL-FR and has uses the accounting structure of IFRS principles. The website of ifrs.org (2015) gives the following definition: “The IFRS Taxonomy™ is the global standard issued by the IFRS Foundation to markup electronic IFRS financial statements. By providing the IFRS Taxonomy, the IASB can ensure that the taxonomy used is an accurate representation of the International Financial Reporting Standards ('the Standards').” Mapping
In this thesis a mapping is revert to as a connection between a source and a target model saved in a XML file. This XML can be used in applications for the correct conversion of (financial) information. For example from a functional perspective, when using RGS, a mapping from the (source) financial administration to (target) RGS can be made to make sure the accounting numbers are connected with the right reference numbers. By using this mapping in the financial application the right values belonging to the accounts end up at the right reference numbers. At the requesting side mappings between RGS and the taxonomies will make sure, these values will be placed at the right place in the applications of the requesting parties. Depending on variables like company size and legal structure which are defined in the taxonomies.
3 Research question
3.1 Research questionCurrently one of the main problems in using XBRL seems to be that different chart of accounts are used for the exchange of financial data. This leads to many mismatches and inefficiencies. Because RGS is developed to provide a solution to this problem it is interesting to research to what extant professionals in the discipline of Finance and IT are confirming about this. The research question that logically arises from this is the following:
“To what extent does RGS provide a solution to the problem that different chart of accounts are used for the exchange of financial data?”
This can be investigated by determining the quality of the information which is exchanged with the aid of the RGS. Starreveld has prepared a model in 1994, which describes what the most important factors are of high-quality data. It is possible measure the opinion of professionals in this field. So we can analyze to what extent the data meets these requirements after it has been converted using the RGS. The four most important aspects of the quality model are ‘understandability’, ‘fitting the current information policy’, ‘efficacy in a broad sense’ and the ‘reliability’. Whereby the efficiency has a number of in depth levels. Based on these different aspects I have added four research questions that should underpin the main question, these are the following:
To what extant is the data understandable after it has been exchanged using the RGS?
Is there a positive association between the implementation of RGS and the understandability of exchanged financial data?
Is there a positive association between the implementation of RGS and current information policies?
Is there a positive association between the implementation of RGS and the efficacy of exchanged financial data?
Is there a positive association between the implementation of RGS and the reliability of exchanged financial data?
Is there a positive association between the implementation of RGS and consolidation processes?
Is there a positive association between the implementation of RGS and benchmark opportunities?
Answering these questions might provide insight into the value of the Reference Ledger Schedule. For example, because the logistics of the financial data exchange between systems can be more
streamlined. In terms of quality: less likelihood of erroneous codes. In terms of efficiency: faster data exchange, reduce re-coding. It could indicate whether the RGS is a permanent solution to the clutch problem or that it may be a temporary solution.
Answering the research question could be used in the future as a basis for quantitative research. For example, because in a few years it can be measured if the use of SBR (XBRL) has increased within the SME of the Netherlands after implementing RGS.
4 Theory
4.1 Standardization
The demand for a reference scheme has arisen because companies have their own specific accounting schedules and if they want to use XBRL tailoring is actually necessary. There are specific mappings required between the administration and the taxonomies. Taxonomies change every year because of changes in regulations and legislation. This requires new mappings every year for each company. Currently standard mappings are developed between RGS and the different structures of the taxonomies. If adjustments are to be made in the future on the XBRL structures there are some modifications needed to keep the mapping up to date. These mappings will be applicable for every company that uses RGS because of the standardization (Stokking, 2015). By using a reference ledger schedule in the financial software of different company’s standardization will arise. This could lead to consistent quality of the exchange of financial data between companies (Westra, 2014). Because there will be less converting actions necessary to interpret the used accounts. For the use of XBRL this could mean a large enhancement because, if a major number of company’s use the same reference ledger schedule to deliver their financial figures one important converting step can be optimized. RGS is in this sense a step closer to the source in comparison with the current SBR program. If the control infrastructure is automated it could improve efficiency both for supplying and requesting parties. The better data are standardized, the more opportunities will arise for external analysis (Ipenburg, 2015).
Based on the information above we can argue that the implementation of the RGS will lead to more standardization. This is because the account numbers of a company will be connected to the standardized reference schedule. Therefor one of the underlying theories of this paper will be the ‘Standardization theory’. Standardization is described as;
“A framework of agreements to which all relevant parties in an industry or organization must adhere to ensure that all processes associated with the creation of a good or performance of a service are performed within set guidelines. This is done to ensure the end product has
consistent quality, and that any conclusions made are comparable with all other equivalent items in the same class. ” (UK Essays, 2013).
Another definition of standardization given in IT literature is as follows;
“The aims of standardization are straightforward and logical. By providing technical criteria accepted by consensus, standards promote consistent quality and economic production, simplify manufacture and encourage interchangeability. ” (Noble, 1989).
Especially the consistent quality and the encouragement of interchangeability seem to be applicable to the RGS.
Chan et al. place a link between standardization of financial reporting with XBRL and business globalization with the following statement;
“As XBRL and related technologies evolve, the quality and clarity of financial reporting information will improve. Standardization of financial reporting data and the convergence of international taxonomies will become increasingly important as businesses globalize.” (Chan et al., 2012).
Like the IT-auditor van Wessel (2011) states, quality is a crucial aspect in the corporate-IT-standardization processes. The standardized ledger schedule might bring consistent quality to the use of XBRL. If a certain degree of quality is guaranteed by using XBRL this could lead to significant cost savings for accountants and tax specialists (Geijtenbeek, 2013).
At the same time there might be more time for improving the quality of other aspects of their work. There are also benefits for the entrepreneurs and requesting parties, these will be discussed later on. Starreveld made a model for measuring the quality of information (1994). With this model it should be possible to measure to what extent data quality is enhanced by the implementation of RGS. This model is given at figure 1.
Figure 1: Quality model. Source: Quality requirements of information, Starreveld et al., 1994, p.129.
1. Understandability. The quality aspect ‘understandability’ refers to the degree to which information users can grasp the meaning of the information received with their minds. Uniformity improves the understandability.
2. Fitting information policy. The information to be provided should fit within information policy of the receiving entity.
3. Efficacy (in wide-sense). The table makes it clear that the quality aspect ‘efficacy’ is a factor which consists of many variables. It indicates that the usefulness of providing information to be used for a specific purpose or for a particular function. Information is only useful if the information does not only contains oriented content (3.1), but it also has to be provided timely (3.2) and presented in a form that is suitable to the user (3.3).
3.1 Intrinsic efficacy. Intrinsic efficacy refers to the ability to achieve the purpose for which the information is provided. Information responds only to the (user’s) goal if the information meets the following criteria: relevance, accessibility, sufficiency, consistency and quantification.
1. Understandability 2. Fitting information policy 3. Efficacy 3.1 Intrinsic efficacy 3.1.1 Relevance 3.1.1.1 Orientated 3.1.1.2 Accuracy 3.1.1.3 Critical content 3.1.2 Accessibility 3.1.3 Sufficiency 3.1.4 Consistency 3.1.5 Quantification 3.2 Timeliness 3.3 Representation form 4. Reliability
3.1.1 Relevance. Relevance is defined as the degree to which the information is useful for a specific subject. This term is often confused with the term ‘intrinsic efficacy’, but the latter refers to information that should be provided, so whether she is or is not provided. The relevance of information will be enhanced if certain aspects are met, these are:
3.1.1.1 The orientation of the information. That the information should be focused on the purpose for which it was provided seems to be obvious. Nevertheless in practice a lot of information that is provided is redundant (information overload).
3.1.1.2 The accuracy of the information. This is a collective term for the amount of data and the level of detail. Opportunities to the amount of data and the level of detail are associated with substantially aggregation and selection. Aggregation means the contraction of data. The purpose of aggregation is to condense detail information so that 'the big picture' of the information can be seen.
3.1.1.3 The critical content of the information. This is defined as the degree to which the information must contain an objective critical judgment.
3.1.2 Availability. Availability is defined as the degree to which the required data are available and approachable.
3.1.3 Sufficiency. Sufficiency means that all information that should be provided is indeed provided. If the required information is not available it means that the provided information cannot be sufficient. And conversely, the information also may be insufficient if the required information is available but is not provided.
3.1.4 Consistency. Consistency implies that over a certain time period the provided information must remain the same in nature. It should not prevent that the way data is used changes frequently.
3.1.5 Quantification. The information can be quantitative or qualitative. For rational judgment, it is necessary to provide the required data in quantitative form. Insofar as the data lends itself to be expressed in numbers.
3.2 Timeliness. In addition to the intrinsic efficacy as variable of efficacy in-broad-sense, timeliness is also important. This means that information has to be provided in time so that the purpose for which the information was delivered still can be effected. It is important whether it the information is provided occasional or periodic.
Incidental information is information that should be available at the time the information need is present. In connection with information supplied periodically, there is a fixed-interval information need, whereby the period for which information is provided is the determining factor.
3.3 Presentation Form. The last factor which falls under efficacy is the presentation format. The information and data provided are always presented in a certain consistent form. The data is provided in a certain form in order for the information to attain its objectives, to be adapted as possible to the imaginations and interpretation capacity of the users.
4. Reliability. In reality, the ‘reliability’ factor is a sub-factor of the factor ‘efficacy (in wide-sentence)’ because unreliable information cannot be purposeful. In this table reliability is placed on a higher level because it’s a very important variable for determining the quality of the exchanged data. The concept of 'reliability' is divided into a number of sub-factors, namely ‘correctness and completeness’.
4.2 RGS and consolidation
By standardizing accounting statements from the subsidiaries which will be delivered to the parent company. The consolidation of accounts is likely to be easier by the use of the same reference codes. Here it might become clear quickly which accounts are industry specific and which are not. For large enterprises the use of RGS and thus XBRL in the Netherlands might provide opportunities in the consolidation process. When writing about the concept of consolidation there will be revert to the following concept:
“Basically, the consolidated financial statements aim at showing the total resources managed by the group for the purpose of providing useful information to all the group’s stakeholders, including minority interests.” (RMS International, 2009).
In the traditional process of consolidation it is conventional to collect the information requested by the group from the various subsidiaries. Aerts et al. (2004) states that if the subsidiaries are active in different sectors then chances are that the applications are different and therefore the
information is often not directly usable for the consolidation process. Often, there is information to be added from other systems. It may be necessary to carry out a conversion on the level of the daughter(s) or on group level. In many cases, a spreadsheet is used for this purpose in other cases, special consolidation software can be used. Thus, in most cases this means a manual intervention with usage of a separate software which will lead to an increase in the cost, in the chance of error and the dedicated time. At group level converted data are merged and after the application of established accounting principles this leads to consolidated financial statements. RGS and XBRL might simplify, accelerate and can thus cheapen the consolidation process. Provided RGS introduced at several subsidiaries consistent with the different accounts this will simplify merging of financial data. This way the spreadsheet can be replaced by an XBRL-program that incorporates RGS. The controller then collects in a structured and consistent way the required information and presents it in any format. This requires less effort from the controller who will use a XBRL program instead of different spreadsheets. The more systems and applications that have XBRL reporting capabilities, the easier this will be. By using a recent IFRS taxonomy the data collected by the controller will automatically be stated in the accounting policy of the prescribed IFRS (Pasmooij, 2014).
Consequence for the accountant is that there will be less support work in preparing the financial statements. By contrast, this will result in more services are request to support the implementation of the appropriate taxonomies and the creation of XBRL instance documents will have to be assessed. The controller can further analyze the information, whether used in performing simulates. The controller will create in less time, more reliability and better financial information. In addition, it should be easier with RGS to trace back the consolidated data again to the various subsidiaries because the various components remain available after consolidation (Pasmooij, 2014). The controller of the group also has a number of advantages by the use of XBRL. A first advantage is the ability to read the information which is supplied by the daughters directly in the XBRL own programs. Through the use of the taxonomies the controls may be limited. It is important to note that errors and fraud are still possible. The controller can spend more time analyzing the obtained information and at generating consolidated reports according to IFRS. By integrating XBRL into more information-systems consolidation will also be simpler between different kinds of information-systems.
The group controller can create the desired reports can by making use of one or more style sheets. He can also opt to make the XBRL data available to the stakeholders himself. By using XBRL, the consolidation process is faster because less time is spend at collecting and controlling data. The
creation of different reports can also be automated or a chose can be to set the XBRL files themselves available. Eventually there will be more time for analysis of the available information. This will result in an improvement of the financial information that is reported to the external parties. When merging the data of several companies it much easier to exchange financial data and comparing them given the condition that they all use the same XBRL taxonomy. Pasmooij states that for an integrated approach it is necessary for the controller to discuss with the software vendor on the possibilities of the software in the area of consolidation using XBRL (Pasmooij, 2014). XBRL eliminates the need to integrate disparate database applications for entity wide reconciliation and consolidation purposes since it creates a universal language for every piece of data that can be understood by any application. As a result, internal auditors can monitor information flows for anomalous activity much more efficiently and frequently using off-the-shelf computerized audit tools.
4.3 RGS and benchmarking
"Benchmarking is the process of improving performance by continuously identifying, understanding, and adapting outstanding practices and processes found inside and outside an organization." (Kelessidis, 2000).
RGS could have a positive influence on benchmarking possibilities. Nowadays financials of companies are difficult to interpret and in many cases ratios are used for analysis. However, because every company is free to use their own accounting scheme and methods, to a certain degree, proper analysis are complex. By standardizing on a large scale, companies in the same sector might be easier to compare. Because the accounting numbers will contain the same type of financial information. In addition it will be easier for the financial applications to retrieve information from a uniform format. So if a standardized reference ledger schedule were to be used this might lead to the possibility of better analysis. This brings us to the following definition; “Benchmarking is a continuous and systematic process of evaluating companies recognized as industry leaders, to determine business and work processes that represent best practices and establish rational performance goals.” (Zairi et al., 1994).
RGS could also improve the opportunities for benchmarking publicly. For example, if an entity like CBS gets data tagged with the RGS codes from the SMEs, it may be so beneficial for benchmarking that the information could be made available publicly. If the information is timely delivered and made available more frequently, it could be possible to make current analyzes (Ipenburg, 2015).
4.4 Agency theory
Agency theory is concerned with the conflicting interests of principals and agents. The agency theory is described as a relationship in which one party (the principal) enters a contract with another party (the agent) to perform some service on their behalf. In this context, the principal will delegate decision-making rights to the agent (Jensen and Meckling, 1976).
The agency theory is applicable to this subject. Because the different requesting parties have major interests in ensuring that the delivery of financial data is automated as much as possible. Note that requesting parties like i.e. banks can be loan capital providers. The standardization of the data and complete insight by the requesting parties will possibly work in their advantage. Because the information asymmetry between supplying and requesting parties might be reduced. This aspect will be researched in this thesis under the subject of the quality of the financial information exchanged with RGS. In addition, in the long run it is likely that the comparability of companies will be enhanced because of standardization of data (benchmarking). This may influence, for example, the increasing accuracy of investment decisions made by the banking industry. The difference in interest is also confirmed by the notion that mainly the information-requesting parties are investing in the SBR program and the entrepreneurs not so much.
5 Financial Reporting
5.1 Financial ReportingFinancial Reporting is one of the many required side effects of executing an organization in the current modern era. This side effect has had tremendous technological development in recent years. In this chapter an aspect of the current technological development of mandatory financial reporting in the Netherlands will be described.
Almost every entrepreneur, is required to provide financial reports to governmental entities and banks. For example, the website of Ondernemersplein (2014) states that the Tax authorities, the Central Bureau of Statistics (CBS) and the Chamber of Commerce (KVK) all demand certain information. The data required by these organizations differs from one another but there is also a lot of overlap. And even though lots of data streams are automated, until this day these companies are processing hundreds of thousands documents a year, manually. This is the main reason these entities are searching for ways to standardize and simplify the exchange of (non-)financial data. One way to digitalize financial data is through the use of XBRL. XBRL Netherlands is founded on 1 November 2002. The website of Instantreporting (2009) states that XBRL Netherlands is a non-profit initiative of several companies, intermediaries, governments and educational institutions. These where the first parties to advocate the use of XBRL in the Netherlands. Thereafter there was an initiative to start the Dutch Taxonomy Project (NTP). This project is funded and managed by the Ministry of Justice and Finance. They made XBRL 2.1 available in 2003, this specification received the status of recommendation. This means companies where recommended to use XBRL for the financial reporting process. Nowadays the Dutch SBR-program is supported by these organizations. The SBR Program is a restart of the Dutch Taxonomy Project (NTP) since 2009. SBR (Standard Business Reporting) is a program that uses the XBRL as underlying language for the transmission and diffusion of (non-)financial data. According to the website of XBRL.org (2013) the use of XBRL is mandatory in the United States, the United Kingdom, Australia, China, Canada, India, Belgium, Japan, Singapore, Brazil, Denmark, Germany, Ireland and Spain for submitting reports to the government.
In the Netherlands SBR is the only method to deliver, by declaration- or administration software, the: income tax returns, corporate tax, value added tax (VAT) and the declaration of intra-Community services (ICP) to the tax authorities. (ICP services are performances delivered to customers who have to do VAT return in other EU countries). Since January 2013 the delivery of IB and corporate tax declarations by software to the tax authorities is mandatory. The delivery of
statistical reports to CBS and credit reports to banks will follow in the near future. In the table depicted underneath there is an overview given of the organizations in the Netherlands, the kind of reports they require and the standardized way through which these reports can be delivered.
Table 1: overview of SBR reports. Source: self-constructed table, based on information found on the website of ‘http://www.sbr-nl.nl’.
Organization Reports Channel
Tax Authorities Tax declaration sales tax (1 January 2014)
Declaration corporation tax (since 1 January 2013, mandatory)
Income Tax (since 1 January 2013, mandatory) Indication of intra-Community (1 January 2014) Messaging Service Tax (1 January 2014)
Deferment Scheme (1 January 2014) Reporting Payroll tax (from January 2015) Messaging Service Fee (from April 2015) Pre-filled tax return (as of April 2015) Surcharges (from July 2015)
Digipoort
Central Bureau of Statistics
Statements Product Statistics (from 2008) Statements investment statistics (from 2008) Statements Turnover Statistics (from 2008)
Digipoort
Chamber of Commerce
Annual reports (possible since 2009, mandatory since 1 January 2015)
Digipoort
Banking (ING, Rabobank, ABN-Amro)
Credit Reports (since February 2013): Small entities (statutory and consolidated) on fiscal and commercial basis, Medium entities on a commercial basis and for Natural persons.
Banking Income Tax (BIS) return (profit annex) WOZ report
BIV(Bancaire Infrastructurele Voorziening)
The Tax Authorities communicate that SBR means standardization of data (Belastingdienst, 2014). In favor of standardization all information that that is required by government agencies, is included in the Dutch Taxonomy. This is a dictionary with definitions of all the data needed to compile mandatory reports. In terms of processes, Digipoort is the exclusive digital channel for the delivery, processing and receiving messages from companies and intermediaries to various government organizations (and vice versa). The underlying technique used is based on XBRL. XBRL is an open standard that entails labels to certain information. These labels say something about the meaning of that information. This standardization SBR offers many benefits: the reuse
of data (less work), improved quality of reporting, fewer errors in the processing of reports, the earlier discovery of errors in reports and faster delivery.
The Dutch tax authority
The website of the Dutch tax authority (Belastingdienst, 2015) states Standard Business Reporting (SBR) is a method for compiling and submitting financial reports. With SBR, you contain the data in the records once in a standard way. The accounting system is the source file: you can easily reuse the data for different types of reports to government agencies and a number of banks. So you have less work in compiling the required reports.
The Dutch tax authority sees ‘Digipoort’ as a reliable government channel. All the reports that you provide to governmental institutions with SBR, walk through one digital channel from the government: Digipoort. The reports that you provide to the participating banks with SBR, walk through a similar channel, the ‘Bancaire infrastructurele voorziening’ freely translated in ‘Banking Infrastructural Facility’.
Why SBR according to the Dutch tax authority? SBR means standardization of:
• Data
In order to standardize data, including all the information you should provide to government agencies included in the Dutch Taxonomy. This is a dictionary with definitions of all the data required for the preparation of mandatory reporting in the areas of tax, accounting and statistics. Thanks to this taxonomy data can be re-used.
• Processes
Digipoort is the exclusive digital channel for supplying, processing and receiving messages of entrepreneurs and intermediaries to various government organizations (and vice versa).
• Technique
SBR uses XBRL. XBRL is an open standard that resists labels to certain information. Those labels say something about the meaning of that information.
This standardization provides SBR many benefits: the reuse of data (less work), improved quality of reporting, fewer errors in processing reports, and the earlier discovery of errors in reporting and quicker receipt.
Central Bureau of Statistics
The website of the CBS (2014) states that the benefits of deposit of economic statistics through SBR according the Central Bureau of Statistics are:
• Because the other parties also use XBRL, there is only one connection needed with the administration software when two or more requesting parties have the same data need. They expect that in the future, more government agencies will be affiliated with XBRL and that will lead to more efficiency.
• If the XBRL message is received correctly by the CBS, there is no need to fill in a questionnaire regarding that period.
Chamber of Commerce
It is possible to deposit the financial statements with XBRL to the Chamber of Commerce since the late 2008 (KvK, 2015). In 2009 the Chamber of Commerce received the first tax base financial statement. The filing of annual accounts through SBR will be required from 1 January 2016. The benefits of filing the financial statements via SBR according to the Chamber of Commerce: • convenience for the operator: no manual actions,
• ease the intermediary of the entrepreneur: there is less chance of errors
• cost savings: you do not need to print the financial statements and send by post.
• overview of the process for depositing the financial statements (Chamber of Commerce, 2013): you get immediate confirmation of the deposit, you will receive an email with a PDF presentation of financial statements.
Financial Reports Cooperative (FRC)
The cooperative is an initiative of ABN AMRO, ING and the Rabobank with the purpose of the implementation and operation of SBR for the lending process. According to the website of Finan (2015) the ‘Bancaire Infrastructurele Voorzieningen’ (BIV) has been realized to make the electronic delivery easier for entrepreneurs.
ABN AMRO, ING and Rabobank took the initiative in 2009 to start using SBR for exchanging data between the entrepreneur and the bank. The three banks work together for this purpose in the Financial Reporting Cooperative (FRC). The FRC has developed the Bank Taxonomy based on the Dutch Taxonomy of the government. With the taxonomy a structured delivery of information to banks is possible. The delivery takes place via an independent reporting portal (BIV), an online supply point for all banks. In November 2009 Topicus Finan has been
commissioned to build the BIV and to maintain its efficacy. The BIV can be seen as an equivalent to Digipoort but it is utilized by the banking industry.
Providing parties
Dutch law states the following. Anyone who has a business or independently carries a profession is required to keep records by its financial position and of everything regarding his business or profession, to the requirements of that business or profession, and the corresponding books, records and other data carriers in such a way that at all times its rights and obligations can be known (BW3:art.15i lid 1).
The supplying parties face an administrative burden because every year they must provide various reports to requesting agencies. SBR is also created to make this process more efficient. This brings us to the question of the possible pros and cons for the contributing parties if they wish to make use of RGS and thus XBRL?
Benefits and Downsides Benefits
-Unambiguous encryption of financial data consistent with the manner in which it is preferred by requesting parties (Kinds, 2014).
-After a proper one-time connection of the ledger with RGS, it is the responsibility of the requesting parties to provide a taxonomy that is correctly linked with RGS (Westra, 2014). -It provides clarity. By using RGS as primary ledger the discrepancies between the records of several companies will fade as much as possible (Westra, 2014).
-Standardizing the exchange of (audit) data will lead to more efficiency (Westra, 2014).
-It might provide the ability for benchmarking. Given that other companies within the relevant business sector also apply RGS (Kinds, 2014).
-Automated validation of accounting rules (Kinds, 2014).
-Unambiguous encryption of financial data may offer enhanced access to e-invoicing (Kinds, 2014).
-Accounting according to the regulations of the tax authorities (Kinds, 2014). Downsides
Note that most of the downsides are of a temporary nature. -The schedule is extensive this might make it cluttered.
publicly available.
-By using RGS and XBRL as reference schedule in the financial reporting procedures much will change in comparison to the current reporting processes. This will require a learning process and a time-investment (Bisschop, 2009).
-When handling RGS as primary schedule it will change the entire bookkeeping of a company. Using RGS as primary schedule might be more complicated because it requires a more intensive change.
-Not all software vendors have integrated RGS in their ERP-system yet.
-Costs to train staff to work with XBRL and RGS . It also requires a time investment (Bisschop, 2009). In addition financial reporting is often short-term work.
Other attention points
-It requires an additional application, this means a new functionality in the system.
-Needed time for the implementation and the resources for maintaining the proper use of RGS (Bisschop, 2009).
-Fear of losing flexibility by definite terms (Kinds, Oct. 2014).
-XBRL is not completely known, in particular the use of it (Bollyn et al., 2009). -Publicity, insufficient support in the current Dutch society (Kinds, Oct. 2014).
Estimated costs
Another important item for the entrepreneur is to be able to estimate costs of implementing RGS in advance. The costs of RGS itself are not high. This is because it can be delivered along with the purchase of an ERP system. This may require the entrepreneur to buy a license for the functionality, which costs currently are not concrete yet and may vary among software vendors. Regarding XBRL, the costs depend on the level of ambition of the entrepreneur. If you want to build XBRL across the full width then all data in the organization should be tagged (with an XBRL tag name). Because you do not know in advance what data will be collected in the element name, you can only choose your own element names. Many of those names you can infer from international reporting standards such as IFRS and GAAP. Somewhere in your accounting package you will need to keep a conversion table that converts your element names to those of the rapporteur. This mapping facility must have the ability to aggregate data. This is how it worked before RGS might provide a solution for this. But will only be based on XBRL-FR.
If you choose to build in only specific XBRL reports, it can suffice to include a mapping table. This way however, you cannot use the full value of XBRL. You can also import XBRL. For example, to perform benchmarks compared to your direct competitors provided they publish their figures also in XBRL. Incorporating XBRL enabled software helps you to do evaluations XBRL Instances (with messages), depending on your needs, this may be a simple API of several thousand euro’s, to heavy software that work with its own database where the price may rise to the tens of thousands of euro’s. XBRL validation software need not cost more than 1.500 euro’s for a single license (Rhocon, 2010).
Implementing RGS
Which steps does a company have to take to implement RGS?
Steps to take for the implementation of RGS are the following. The company must purchase an ERP system which is integrated RGS. Or if they already have such a system has to buy the specific functionality when it is offered by the supplying party. It is useful to take note of the functioning and structure of the RGS. Subsequently, it is envisaged that the organization couples its current ledger system at the RGS. It provides a link between the ledger and accounts of RGS. It is important that an intermediate checks the link to ensure that it is error free and in accordance with what is meant by the requesting parties. After the coupling has been laid, it is the intention that RGS can be generated in XML format. In this XML file the amounts per account will be found and the type of accounts. This XML file would then have to be integrated in the software the requesting parties so a link can be established between RGS and the taxonomy used in the application of the relevant body. Perhaps some ERP systems offer the ability to export an XML structure in which the information-requesting party uses it. Because the RGS already have SBR tags in an administration that connects to the RGS financial data thus provide an SBR feature. The different ERP packages might deal differently with the use of RGS. Therefore it is useful for the entrepreneur to inform before taking a package into usage, depending on the purpose.
5.2 XBRL
XBRL specifications describe, in a generic way how XML can be used for reporting financial facts. XBRL (eXtensible Business Reporting Language) is a code language saved in XML file format (Daas et. al, 2008). The financial structure of different company legal forms is specified in the taxonomy. The taxonomy is written in XBRL. Depending on the requesting company the Dutch ‘Banken Taxonomy’ or the ‘Nederlandse Taxonomy’ is used.
According to the Logius SBR programma (2013) the reporting of financial facts can happen from several angles, for example contained in accountability reports or as individual transactions. For each approach, specific modeling rules (in other words, architecture bases) are present. Currently modeling rules are developed by XBRL International for Financial Reporting (XBRL FR) and Global Ledger (XBRL GL). There is a distinction between XBRL Financial Reporting (FR), where the data are converted to the XBRL at the end of the chain at the moment of reporting and XBRL Global Ledger (GL), where the data is already provided with a label at the primary recording (XBRL Nederland, 2008).
The website of Fiscalistenonline (2010) states that the most known and used type is XBRL FR (Financial Reporting). Among others the Dutch Taxonomy is based on XBRL FR. Currently this is the only official used XBRL type in the Netherlands. XBRL FR aggregates information from the ledger together to reports for external financial reporting purposes. It is highly useful for the sharing of aggregated data like financial statements, regulatory filings, tax returns, bank filings and investor relations. In appendix 1 a depiction of a connection, also known as ‘mapping’, between the ‘bankentaxonomie’ of 2015 and an IFRS application is given.
In addition to an application in financial and business reporting, XBRL has a future in exchange of financial transactions (XBRL Nederland, 2008). XBRL GL is intended for capturing and sharing of ledger transactions. XBRL-GL is an application of XML technology that has the ability to capture and communicate any fact gathering required for business reporting that is represented by the accounting entry core of "account," "amount," and "date."
It can be used for consolidation and integration, management and financial reports, budgeting and forecasting, performance measurements and executive dashboards. It works especially for the benefit of audit by tax authorities for example. This is according to what is realized today with the audit file in the Netherlands. With XBRL GL as a world standard it should be easy to make a move to another ledger software and applications from different vendors can more easily communicate with each other within a single company.
generic taxonomy, which specifies the data to be exchanged between ledger systems (Hannon, 2003). Once data is tagged at the lowest level of accounting recognition, it can be used and reused for any purpose. For example, companies with multiple divisions and multiple financial systems could use XBRL-GL as a kind of middleware, bridging the gap from one system to another. For the purposes of XBRL GL knowledge of making taxonomies is not necessary. However, it is advisable to take note of the general characteristics of taxonomies when working with it. XBRL GL is not yet implemented in the Netherlands, the precedence seems to have been for a normalized ledger schedule. This schedule is called the Referentie GrootboekSchema.
Figure 2 XBRL GL and XBRL RF in the reporting process. Source: ‘XBRL in the Banking industry’ (Hoogstraten, 2006).
5.3 RGS
5.3.1 History of RGS
Harold Kinds, formerly the head of the Accountancy department of SRA. In 2004 he made and delivered a standardized chart of accounts, through a working group within XBRL-Netherlands (GBNED, 2014). This standardized schedule was meant to enhance the use of XBRL in the Netherlands just like RGS. The XBRL program in the Netherlands (under the name NTP and directed by the Ministries of Justice and Finance) didn’t embrace the scheme and they solely relied on the data needs of the involved parties, namely: Tax administration, the Chambers of Commerce and CBS. Also, the subsequent SBR program had only based its development on the said data need.
On the website of ReferentieGrootboekschema (2014) it states that during a brainstorming sessions in the autumn of 2011 between the Tax administration Ministry of Economic Affairs, the Central Bureau of Statistics, the Dutch Chamber of Commerce and the Standard Business Reporting program an idea had risen that could possibly lead to further enhancement of the XBRL project in the Netherlands. The basis of the idea was to use a general account hierarchy for the exchange of data between companies and the government, called a "reference ledger schedule". The intention was not to prescribe the schedule as mandatory for the use in the administration of enterprises, but rather to use it as imagery of the administration of companies in a standardized reporting format in favor of the government. To test the viability of this idea an expert meeting was held on September 7, 2012 in Grand Hotel Karel V Utrecht. Attended to that meeting were about 45 representatives of public and private organizations. The meeting showed that participants were positive about the idea to establish a nominalized ledger schedule for the Netherlands.
In the autumn of 2012, the conclusions and recommendations from that meeting translated into a work plan. After that there was a setup of three working groups consisting of experts from several market and government organizations in February 2013. It concerns the following groups: • Working group that will "assemble" the existing schedules:
• Inventory Workgroup / harmonization of the extraction of financial data by the government / non-government:
• Task management and implementation.
Monitoring and steering of these three groups has taken place through the so-called wide expert consultation RGS. This consultation is a continuation of the meeting on September 7, 2012. This
wide expert consultation RGS was attended by around 25 experts of market and government entities. In 2013, the widely expert consultation convened three times, also several meetings of the working groups occurred.
The working groups have released the development and delivery of the following products in 2013 and these products are subsequently adopted by the wide expert consultation of RGS:
• The proposal for the management of the Reference Ledger Schedule (4 September 2013): • The proposal relating to the license-free use of the Reference Ledger Schedule (6 September 2013):
• The proposal for the Implementation of the Reference Ledger Schedule (December 9, 2013): • The proposal for the establishment of a Temporary organization implementation RGS (9 December 2013):
• Version 1.0 of the Reference Ledger Schedule (18 December 2013).
On 27 May, the directors gave formal approval at a conference to launch the completed RGS products. In addition to the specific target groups - and of course the directors and members of the wide expert consultation - were also invited representatives from the trade press. The RGS was presented in a ‘tangible’ form during the conference. Harold Kinds has had foresight in 2004, which is finally rewarded in the form of RGS.
5.3.2 Description of RGS
The Reference Ledger Schedule (RGS) is a semantic standard that applies in the (administrative) reporting domain. RGS is a tool that can make translations possible between various formats ledger and on the other hand the government NT (and the BT). Companies hereby keep their choice about which ledger schedule they want to use, but they’re also free to use the structure of RGS as their ledger format. If they go for the second option, they don’t have to create a separate translation anymore between their own ledger and a taxonomy. The RGS is a standard ledger schedule based on the five most commonly used chart of accounts in the Netherlands. It is designed to simplify the use of XBRL and thereby to simplify the financial reporting from the bookkeeping. Its schedule consists of more than two thousand general accounts. The purpose of this is that it should be possible for every account of a company to be located under a reference code of RGS. The goal is to establish a permanent link between the accounts of a company with RGS and thereby with internal and external reports.
The intention is that the RGS is integrated in the General Ledger of company’s (mainly within the SME). After which the different charts of accounts of companies can be linked to the RGS. The RGS is then connected to a taxonomy on the output side of the General Ledger. With SBR the declaration / reporting is done of financial data internally and to interested entities such as banks, the Dutch Chamber of Commerce, the CBS and the Tax Administration. Because of this RGS is seen as a bridge between the financial administration and the reporting of financial information by XBRL. The general ledger accounts of customers using RGS will be associated with the reference codes. The software suppliers provide interconnection (mapping) to the reference codes with SBR taxonomies and audit logs. Once that has happened, changes in the reporting of the software will be processed automatically. Nowadays, intermediaries need to implement adjustments for all customers manually, with RGS software that can be modified consistently, and that saves a lot of time.
On the website of ReferentieGrootboekschema (2014) it states that RGS can be seen as a catalyst for the SBR-reports. RGS and SBR complement each other. By various organizations RGS is considered the ideal connection between the general ledger chart of accounts and Standard Business Reporting. So far, the first steps have been put in order to achieve integration of RGS and SBR. There are several software providers that are currently working on implementing RGS in their ERP-software. In appendix 2 a connection, ‘mapping’, between RGS and the ‘BankenTaxonomie’ of 2015 is given.
5.3.3 The structure of RGS
The structure of RGS ledger number is as follows: position 1 and 2 are the main category, position 3 and 4 are the ledger section within the main category these can be expanded with continue numbering, position 5 and 6 for the ledger account within the rubric, position 7 and 8 are used for mutation within the general ledger: continued numbering may also be implemented when various types of transactions should be distinguished for mutations. Position 9 is used for the extension of the ledger. An example of the RGS ledger numbers is given below this page. In addition to numbering the RGS has description codes, which consist out of the following: -The ledger description as the set account name as uniform.
-Cover code for those accounts that depending on their balance (debit and credit) different modes of reporting are applicable, RGS makes use of this code folder. The most known example is the account for liquid funds. When is has a positive balance, it’s called cash and when has a negative balance, it is called short-term debt.
-Reference code: just like the reference ledger number, the reference code is unique for each account within RGS. But in contrast to the ledger reference number, the reference code exists of letters. Following an indication of the RGS is given in table form. The ‘B’ stands for ‘balance’, the ‘Iva’ stands for ‘immaterial fixed assets’ and the ‘kou’ stands for ‘costs of establishment and emission of shares’.
Ending theory
Currently one of the problems in using XBRL seems to be that different chart of accounts are used by companies for the exchange of financial data. In combination with changing
Taxonomies this leads to mismatches and inefficiencies. Because RGS is developed to provide a solution to this problem, it is interesting to research to what extant professionals in the discipline of Finance and IT have confirming expectations.
The main object of the research is to explore whether RGS provides a solution to the problem that within the chain of financial reporting there are different chart of accounts used in the digital exchange of financial data. In addition to the theoretical research the research is done by surveys and interviews executed in the sector of Finance and IT. Starreveld has prepared a model in 1994, which describes what the most important factors are of high-quality data. It is possible measure the opinion of professionals in this field with surveys and interviews. So we can analyze to what extent the data meets these requirements after it has been converted using the RGS. One of the main variables that is researched is the impact on quality of the exchange of financial information. In which quality is subdivided in understandability, fitting information policy, efficacy and reliability. The other two variables are the expected impact of RGS on consolidation and benchmarking processes. The results are interpreted with statistical analysis and placed in the right context by means of the incurred interviews.
6 Research method
6.1 HypothesisBased on the above research questions I have formulated a number of hypotheses. These hypotheses are rejected or not depending on the answers given on the survey done by financial and software professionals. Research will be done with a survey with Likert scales. Some of the questions will be about the qualitative aspects of the exchange of financial data using the RGS. The first hypothesis tests if RGS the implementation of RGS is positive associated with the quality of exchanging financial data. The overlapping question is whether the implementation of the normalized RGS is positive associated with the quality of exchanging financial data.
H1A: the implementation of the RGS is positive associated with the understandability of the exchanged financial data.
H1B: there is a positive association between the implementation of RGS and the expectations of whether it fits well in the current information policies of companies.
H1C: the implementation of the RGS is positive associated with the efficacy of the exchanged financial data.
H1D: the implementation of the RGS is positive associated with the reliability of the exchanged financial data.
Another interesting aspect of this is to consolidate company results. This is especially interesting for large companies. Because it might lead to decreases in time and costs spend. But also for the company itself because she could compare her position with other subsidiaries. And less converting will have to take place at the level of the subsidiary. For this it is necessary that for all companies in the group, express their financial data using RGS and there is an XBRL-consolidation program installed.
A third part is about other opportunities that arise from the implementation of the RGS. An interesting aspect of this is to compare company results. This is interesting for shareholders, banks and other investors. But also for the company itself because she could compare her position with its competitors or other market players. For this it is necessary that for all companies in the market, the financial data is expressed using RGS and that the data is made available on the free market.
H3: the standardisation of the chart of accounts is positive associated with the possibilities of benchmarking.
6.2 Research Methodology
The initial method was to measure the impact of the RGS on the underlying variables through the plotting of a survey. Because the topic of RGS is fairly new, we have chosen to support the results by interviews with parties that might deal with RGS. Based on the theory of Starreveld and in communication with my supervisor and placement supervisor, I prepared several survey questions. From the theory the following variables emerged which we wanted to investigate: understandability, fitting information policy, efficacy, reliability, consolidation and benchmarking. The first four have arisen from the quality model of Starreveld.
Per variable we have asked at least 3 questions. We also added a few other questions in the survey because we were curious about the answers of the participants. This has ultimately resulted in a survey of 57 questions, issued in both Word and on the internet using Google Forms. The survey questions were answered using a Likert scale of 1-5, in which the participants were asked to indicate their opinion to what extent they agreed with questions or statements. The survey questions are arranged in such a way so that the people were asked for the expected impact of RGS on the underlying variables. This method was chosen because RGS is fairly new at the time of the research, so it is no general commodity and companies are currently working to integrate it into ERP systems. Because of this it was not yet possible to analyze two samples, based on before and after situations. Therefor it was important that the participants have knowledge about the schedule and also about the climate in which this it is introduced. When selecting respondents we have therefore mainly approached companies in the financial sector as well as software vendors. We have approached about 80 people in the business from which we knew they had experience with RGS and/or XBRL. We have approached a number of companies asking if they wanted to make people available internally for participating in the survey. Ultimately, this quest resulted in a response rate of 15 people. The sample group consists of 5 people from accounting firms, two from the banking sector and 8 work with software vendors. The companies that have participated are the following: Administration Paul Jansen, CaseWare, Deloitte, Ernst & Young, ING, NBA, Rabobank, SRA, Topicus Finan. The relevant participants have been given two weeks to complete the survey.
In the feedback we got from the approached parties we sometimes heard that the questions were not easily filled in. For completing the survey a specific set of knowledge was necessary. The questions in the survey were quite specific and the sample size was relatively small, therefore we have chosen to complement the quantitative reactions with qualitative information. The qualitative information could be of great use for placing the survey results in their right context. The
