A company’s annual report contains traditional financial statements, [m7] footnotes, and a wide set of textual materials. An entire information intermediation industry has emerged to extract, standardize and organize information for the final user. Large companies can acquire S&P’s Compustat that contains most public US companies financial data normalized for use. The emergence of the XBLR standard may facilitate the utilization of data and comparison among companies at a more democratic level where individual users have an Excel add-on and harvest the information themselves without any data transformation. [SS8] However, most information contained in an annual report or an SEC filing is not the formal information from Balance Sheet, Income Statement or Uses and Sources of Funds. It includes footnotes, comparative history and a wide array of soft information available from the annual report. New techniques will need to be developed to extract, categorize and disseminate the qualitative information contained in financial statements.
Overcoming these deficiencies in the current reporting system requires taking advantage of radical changes in the technological basis of business and an equally important shift towards a process perspective of the firm.