Transcript Connecting with XBRL

International Conference on XBRL:
Current Issues and Future Directions
Providing Assurance on XBRL Instance
Documents of Financial
Information
October 24, 2003
Paul Penler, Ernst & Young Global XBRL Leader
AICPA XBRL Implementation Task Force – Chair
Agenda
 Why Now?
 Why is Assurance Important?
 Specifics of AT 101 Interpretation
2
Why Now?
 Since the inception of XBRL in 1999, it has been perceived
that the ability to provide third party assurance is required
for the acceptance of XBRL reports in the market place.
 We expect increased numbers of XBRL Instance
Documents of audited financial statements in the market.
 It is to the best interests of the market, and to auditors, that
the profession provides guidance on this emerging
challenge in a clear, consistent, effective and efficient
manner – prior to the existence of thousands of XBRL
Instance Documents of audited financial statements.
3
Emerging Use of XBRL
 Several public companies have posted XBRL Instance
Documents of their financial statements on their web sites
– some have even submitted to regulators.
 Several Banks are assessing or piloting solutions to have
borrowers submit their financial statements in XBRL to
Lenders.
 Several regulatory agencies have already implemented
XBRL,are implementing XBRL or are in the process of
evaluating XBRL.
 In a few years, XBRL may be the primary medium in
which financial statements, and other financial reports,
are submitted to Regulators and Banks.
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Why is Assurance Important?
To the Market:
Users will want to obtain confidence that the electronic
version of the financial statements are the same as the
human readable version.
To Assurance Providers:
The ability to extend assurance on the financial statements
to this new electronic medium is a reasonable evolution of
the auditing profession.
5
Viewing a XBRL Instance Document
There has been some discussion as to the ‘requirement’ that an XBRL Instance
Document needs to be ‘viewed’ through a piece of software. The viewing of an
XBRL Instance Document (*.XML) through a software application, is very similair to
viewing a finacnial statement in a PDF format in an Acrobat Viewer. Both .XML and
.PDF files need a software application to be ‘fully comphrehendable. However, both
could be viewed ‘raw’ in an application like Microsoft Notepad.
PDF Viewed In Notepad - Example
XBRL Assurance Questions Being Addressed
 Do existing audit standards provide a framework
for providing assurance on XBRL financial
statements?
 What is the recommended approach for providing
assurance on XBRL financial statements in the
short term?
 What enhancements to existing standards are
required to allow for a more robust XBRL
assurance environment?
 What is the recommended path forward to
resolve the longer term assurance issues?
Business Requirements
 The ‘original assurance’ on the audited financial
statements ‘stays with’ the XBRL Instance
Document
 No distribution limitations on the report related to
the XBRL Instance Document
 The solution cannot be cost prohibitive
 The Instance Document is incorporated as part of
an overall client deliverable (e.g. annual report)
that includes audited financial statements and
report
Where we are today – ASB Sept 2003
“Attest Engagements,” of SSAE No. 10, Attestation
Standards: Revision and Recodification, applies to
engagements in which a CPA in the practice of public
accounting is engaged to issue, or does issue, an
examination, a review or an agreed-upon procedures
report on subject matter, or an assertion about the subject
matter, that is the responsibility of another party. Chapter
one of SSAE No. 10 establishes a framework for attest
engagements performed by practitioners and for the
ongoing development of related standards. For certain
subject matter (such as financial forecasts and
projections, pro forma financial information, internal
control over financial reporting, compliance attestation,
and management’s discussion and analysis), specific
attestation standards have been developed to provide
additional requirements for engagement performance and
reporting.
Attestation Standards
- AT 101 Interpretation
 CPAs can provide assurance today on company’s
XBRL Financial Information
 Criteria
 Taxonomies
 Technical Specification
 Who performs audit?
 Audited and Un-audited Information
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Questions?
Paul Penler, Principal, Ernst & Young
AICPA XBRL Implementation Task Force – Chair
[email protected]