It isn't often that you hear about the SEC urging someone to manipulate financial data. But that's exactly what the agency is doing.

And to top it all off, SEC Chairman Christopher Cox believes doing so will level the playing field for average investors.

Huh?

No, the SEC is not endorsing a nation of Enron-wannabes. Instead, the agency believes that by transforming the usual dense corporate financial filings it receives into easily accessible reports, both institutional analysts and individual investors will be better served.

Here's how financial analysis often takes place:

1. One searches through pages of dense verbiage and charts to locate specific data.

2. One then does the same for a similar company to compare results.

3. One loses marked place in first company's report, utters an expletive, and returns to step 1.

4. If one ever makes it to this step (seemingly impossible), one then may export data into a spreadsheet for further analysis.

5. After conducting analysis, one then discovers the original data was inaccurate, utters an expletive, and returns to step 1.

Here's how financial analysis using interactive data should work:

1. One enters a search term.

2. The data is located and can be downloaded to software for further analysis.

By obviating endless loops of frustration and inefficiency, interactive data empowers investors to conduct research. Even the data itself is more reliable. A study has shown that computers that extract data from the SEC website do so accurately only 72% of the time. The agency even hopes that at some point, Internet applications will further enable automatic delivery of data directly to one's desktop in real time.

So far, 20 firms, including 3M (NYSE:MMM), Altria, Bristol-Myers Squibb (NYSE:BMY), General Electric, Microsoft (NASDAQ:MSFT), Pepsico (NYSE:PEP), Pfizer (NYSE:PFE), Xerox (NYSE:XRX), and XM Satellite Radio (NASDAQ:XMSR), have signed on to the initiative. The companies will provide their financial data in a data-tagging format known as XBRL for one year, during which time their experience will be reviewed. For their participation, companies will receive expedited review of their registration statements and annual reports. The SEC will host roundtables throughout the year, beginning June 12, to assess the pilot program.

Although not heavily reported, the advent of interactive data could quietly revolutionize the financial world. Most importantly, it can encourage one to take more steps in one's own financial decision making, and make it easier to do so. More accurate data, coupled with greater and timelier access, can only lead to a better informed public and a more efficient market.

For related Foolishness:

Microsoft, Pfizer, and 3M are Motley Fool Inside Value recommendations. XM is a Motley Fool Rule Breakers pick. Take your favorite investing service for a free, 30-day test drive.

Fool contributor S.J. Caplan endured many endless loops of frustration as an investment banking analyst combing through financial statements in the days when one had to ask a corporate librarian to locate financial reports on microfiche. She does not own shares of any of the companies mentioned in this article.