Ever since the introduction of Electronic Single European Format (ESEF) reporting, European issuers have embarked on a fast-paced learning curve to adapt to the new reality of digital reporting. This has been a high-stakes process for a wide range of financial professions. In a landscape where investors rely on more and more granular and digital data for their analysis, Corporatings has emerged as a strategic ally for auditors and issuers, providing a solution with unique proprietary controls that ensure compliance as well as data comparability and quality.

Quick dive into Prism by Corporatings, a solution that enables the publication of comparable and error-free ESEF reports, setting a new standard for the quality of financial reporting.

‍ESEF data quality impacts all financial professions

ESEF data has revolutionised the financial communications landscape, and in its wake, it has impacted a vast array of financial professions.

Investors have quickly welcomed ESEF as a means to acces and analyse vast amounts of reliable and granular data with unprecedented efficiency – with high hopes of pushing traditional data-crunching methods into obsolescence.

For consolidation teams, the shift to ESEF ist herefore much more than a mere compliance issue. The adoption of this format necessitates a deep understanding of its key features to ensure the compliance of reports, and also enhance visibility to investors. As a result, issuers have been on the lookout for more effective solutions to ensure their ESEF reports’ accuracy. The auditors also have a duty to review digital reporting and carry out the necessary checks.

And they are not alone: financial regulators must also ensure that ESEF reports submitted by issuers meet the prescribed standards. They require tools that enable efficient review of the electronic reports to maintain the integrity and transparency of financial markets.

In a classic domino effect, ESEF data (in)accuracy impacts many other financial professionals. For instance, as the main bridge between companies and investors, Investor Relations (IR) officers cannot afford to present inaccurate data. XBRL software and communication-design agencies are also involved in providing a quality service to produce the digital report.

Yet as companies still grapple with the complexities of ESEF reporting, sign or scaling errors remain frequent across European financial publications.

Sign or scaling: simple errors, serious consequences

Within ESEF reports, values are interconnected througha complex chain of data. When done right, the report allows for unprecedented insights into the methods used to compute the disclosed amounts and ratios. But this sophisticated level of interconnection also means that one simple reporting error may alter the accuracy of those other figures.

For instance, one of the most common pitfalls in ESEF reporting is the input of values with the wrong sign. Choosing the wrong sign, whether a negative number instead of a positive one or vice versa, can trigger a chain reaction of inconsistencies, potentially invalidating an entire section of the report. Unfortunatelyfor issuers, such cases remain frequent: sign errors appeared in no less than 30,9% of 2023 reports…

The same snowball effect can result from other frequent errors. A simple scaling error, for instance adding or substrating a few zeros from a company’s income, can subsequently alter the value of other income-based ratios. Although less frequent than sign errors, scaling errors appeared in 14,3% of 2023 reports.

Prism incorporates other proprietary controls, all of which we will be detailing in a new article shortly. In the meantime, for more insights into the most frequent reporting errors, feel free to check out Corporatings’ 2022-2023 ESEF Observatory.

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All those errors have one thing in common: without proper tools, they can easily go undetected and affect the overall quality of the report. In the face of such risks, Corporatings has created an unrivaled solution to ensure that ESEF reporting errors are properly detected: Prism with proprietary and unique controls.

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‍Say goodbye to ESEF issues with Prism’s unique controls

Drawing from our financial data expertise, Corporatings created a unique set of automated controls that identify 100% of errors and therefore reduce the risk of publishing false reports.

Prism stands out for its distinctive proprietary controls, which go far beyond traditional validation checks. Although they are incorporated in Prism controls, basic checks (such as the Arelle controls) alone cannot grant ESEF data accuracy. This is why Prism targets such errors with its own customised controls. By combining traditional checks and its own proprietary controls, Prism therefore offers the most efficient solution to maximize ESEF data quality.

Prism allows to make the most of ESEF reporting without worrying whether a simple undetected error might invalidate the whole report. Seeing how drastically ESEF data can affect an investor's analysis, issuers have everything to gain by securing their data accuracy with the most powerful and widely used tool on the market. And this tool is just one click away: book your free demo of Prism right now!