Validating your report
1 minute read
Once you are happy with the digital annual report you can move on to validation. The FCA, HMRC and Companies House have their own validation systems. These run some automated checks on filings on submission, as do many tagging software tools. Such checks may flag:
Errors (available in all validations)
These must be resolved before the filing can be submitted. For example, a company will get an error message if they have not provided certain mandatory items or the file itself is not properly constructed.
Warnings (only applicable to FCA and some software)
These indicate that there is something about the file that is unexpected, but that is not necessarily an error. Warnings should be investigated but not all warnings must be resolved. For example, ‘Explanation of change in name of reporting entity …’ is a mandatory tag in the ESEF taxonomy and the absence of the tag will be flagged as a warning. However, if a company did not change its name in the period, the tag is not applicable and should not be used. We have seen cases where companies have tried to circumvent the warning by tagging wording such as ‘not applicable’ with this tag in another, unrelated disclosure.
Calculation inconsistencies (only applicable to FCA filings and some software products)
These indicate that some of the numbers do not add up. Calculation inconsistencies do not make the report invalid but should be investigated. Such inconsistencies may indicate tagging errors such as wrong signs or missing tags, but are often due to rounding. While companies may historically have been comfortable with numbers not adding up due to rounding, they should be aware that automatic checks on structured reports make such inconsistencies more prominent. Note that a file that passes all validations is not necessarily free from error. There are some errors, such as missing or wrong tags, that cannot be picked up by automated checks.
What is next?
Find out about how to Access and Interpret Digital Reporting: