XBRL: the business reporting supply chain and audit impacts Neal Hannon, Co-Chair XBRL Education Committee Bryant College
XBRL: Today’s Overview <ul><li>A picture to start…….  </li></ul><ul><li>‘ e-business’ –  What does it really mean? </li></...
Describe What You See? This is the initial pop quiz……… It is a ‘perception test’………  quiz
Here Are Some 'Normal' Thoughts, but let’s hear some More. <ul><li>A guy in an office. </li></ul><ul><li>Sleeping on the f...
Why Is This Relevant? <ul><li>He works at a '.Com' company. </li></ul><ul><li>The current market cap for the </li></ul><ul...
So Who is that Guy?
If you search for the word “Mercury” on the what would you get? Hg Browsing the Web (Content—without Context) quiz
Change in the supply chain is powerful The EDI model The e-business model The efficiencies driven from / in supply chains ...
The Range of what is under development today………... ACORD ANX RosettaNet FpML CHEMX “Verticals” (Industry Supply Chains) th...
What is XML? <ul><li>Published as a recommendation by the W3C (World Wide Web Consortium) in early 1998. </li></ul><ul><li...
So when will this happen?? <ul><li>Never. </li></ul><ul><li>After I retire. </li></ul><ul><li>Before I retire but too late...
 
CFO Magazine on Investor Relations <ul><li>&quot;The explosive growth of the internet is not only changing the way compani...
Another Quiz? <ul><li>What word goes in the space? </li></ul><ul><li>“_____?____ is the language of business” </li></ul><u...
The Internet Enablement of Reporting XBRL =  e X tensible  B usiness  R eporting  L anguage A new economy language for bus...
XBRL Working Model:  Planned Specifications External Financial Reporting Business Operations Internal Financial Reporting ...
 
What software ‘sees’ is the differentiator and drives benefits (here is an example) ......Program FilesXBRL Demo XBRLDemo ...
How to get the demo <ul><li>http://data.research.freeedgar.com/xbrl/demo/xbrldemo.htm.  </li></ul><ul><li>URL has all of t...
Financial Institutions—and their Users   <ul><li>SMALL BUSINESS  provides  FINANCIAL INSTITUTION  with their information i...
Key XBRL Components <ul><li>XBRL / XML Specification  (XBRL.org) </li></ul><ul><ul><li>Global architecture/technology </li...
So What??…. ‘show me the money’  <ul><li>Reduces cost to publish  information </li></ul><ul><li>Significantly  reduces cos...
What might this enable? <ul><li>User reporting/analysis on a  personalized basis . </li></ul><ul><li>Agents monitoring  ke...
The Growing XBRL Family
 
                                                                                                                          ...
                                                                                                             
                                                                                                                          ...
XBRL and Auditing;   What Changes? <ul><li>XML provides the potential for additional information </li></ul><ul><li>XBRL cr...
 
 
Auditing Systems Using XBRL  <ul><li>I. Planning, Implementing and Maintaining an Integrated Audit Program - Integrated Au...
Auditing XBRL Systems <ul><li>II. Mainframe Systems Software and Control - Operating System Concepts - Security Applicatio...
Auditing XBRL Systems  <ul><li>III. Audit of the Systems Development Process - General Controls within System Development ...
Auditing XBRL Systems  <ul><li>IV. Advanced General Control Audits - Mainframe Audit Program - Audit of the DBA Function -...
Auditing XBRL Systems <ul><li>VI. Audit's Role in Pre-Implementation Projects - Relating Pre-implementation Reviews to Gen...
Is Auditing Different With XBRL? <ul><li>It Depends on </li></ul><ul><ul><li>Representation of financial information </li>...
Is Auditing Different With XBRL? <ul><li>Special Needs </li></ul><ul><ul><li>Care and feeding of Instance documents </li><...
Three Levels of Understanding <ul><li>Auditing of XBRL financial statements requires understanding:  </li></ul><ul><ul><li...
XBRL: the business reporting supply chain and audit impacts Neal Hannon, Co-Chair XBRL Education Committee Bryant College ...
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XBRL Business Reporting Supply Chain and Auditing, Jan 25, 2001

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  • On the left we have an EDI model with the costly systems required among EACH trading partner. Think of this as the automotive supply chain with the OEM on the left and their trading partners on the right. Each of the lines represents the costs associated with the EDI model of telecommunications, data models, data mapping and hardware, etc. In the EDI environment, the costs are often prohibitive for some vendors to participate. In the case of GM, only 20% of their vendors work with them via their EDI platform. 80% of GM vendors work outside of the existing GM EDI platform. The use of XML as common channel tagging scheme provides a single platform for disparate software systems (ERP or other) to exchange data over the web in a manner similar to that exchange that takes place within an established EDI channel. On the right we have the same group of partners working within an e-business framework using a common XML data model. The use of a common or channel XML data model to define the data to be exchanged is a key part of ‘HOW” these exchanges will actually work. Not all of the entities in the supply channel will survive the migration as they are either slow to adopt or unwilling to move towards a more ubiquitous platform: the web. Entry by new smaller and more agile players will also be enabled to meet specific needs of the channel, previously unmet by the larger slower players. In the case of the the Automotive exchange called ‘Covisint’ reflecting ‘Communications, Vision, and Integration’……. The savings are expected to be approximately $1,500 per car. In the case of the Information Technology Consortium called Rosettanet, the 42 participants anticipate savings of $14m PER MONTH each. The costs savings are second only to the speed and agility at which the supply chain operations will be enabled. The fundamentals here are: speed internet platform for global business exchanges based upon common data models that provide for interoperability; expressed in XML technologies developed by market driven consortiums
  • Some companies like IDG have already leveraged XML technologies for use in publishing on their web site. IDG is one of the world’s largest media companies and has adopted XML technologies on their web site…….. The Company IDG is the world&apos;s leading IT media, research and exposition company. Founded in 1964, IDG had 1999 revenues of $2.56 billion and has more than 12,000 employees worldwide. IDG offers the widest range of media options which reach 100 million IT buyers in 80 countries representing 95% of worldwide IT spending. IDG&apos;s diverse product and services portfolio spans six key areas including: print publishing, online publishing, expositions and conferences, market research, education and training, and global marketing services.
  • Here are the Great Plains Financial Statements in an XBRL format. Can you see the differences between these financial statements and those in PDF format posted at their website?
  • Company uses XBRL to standardize financial info that supports the assessment of their portfolio of risk (that arises from dynamic pricing, M&amp;A, etc.)
  • An Instance of XML is a computer file that contains both structure and contextual information. A Master Instance document would contain several levels of information. A segment of an instance document could be created and sent to another system to comply with a reporting requirement. If the audited chicken lays an egg, is the egg audited?
  • XBRL Business Reporting Supply Chain and Auditing, Jan 25, 2001

    1. 1. XBRL: the business reporting supply chain and audit impacts Neal Hannon, Co-Chair XBRL Education Committee Bryant College
    2. 2. XBRL: Today’s Overview <ul><li>A picture to start……. </li></ul><ul><li>‘ e-business’ – What does it really mean? </li></ul><ul><li>XBRL – </li></ul><ul><ul><ul><li>Who </li></ul></ul></ul><ul><ul><ul><li>What </li></ul></ul></ul><ul><ul><ul><li>When </li></ul></ul></ul><ul><ul><ul><li>Why </li></ul></ul></ul>intro
    3. 3. Describe What You See? This is the initial pop quiz……… It is a ‘perception test’……… quiz
    4. 4. Here Are Some 'Normal' Thoughts, but let’s hear some More. <ul><li>A guy in an office. </li></ul><ul><li>Sleeping on the floor. </li></ul><ul><li>Programmer. </li></ul><ul><li>Computer engineer. </li></ul><ul><li>Shares the cubical space with another employee. </li></ul><ul><li>Trashed desk, overflowing junk everywhere. </li></ul><ul><li>29ish look. </li></ul><ul><li>‘ Loser’? </li></ul>Picture
    5. 5. Why Is This Relevant? <ul><li>He works at a '.Com' company. </li></ul><ul><li>The current market cap for the </li></ul><ul><li>Company is $57B. </li></ul><ul><li>They make money. </li></ul><ul><ul><li>($78M NetIncome/$132m in cash flow last quarter). </li></ul></ul><ul><li>He is the CEO . </li></ul><ul><li>The company was founded in 1995 . </li></ul><ul><li>He is worth approx. SIX billion today. </li></ul><ul><li>He was worth $500M when the picture was taken. </li></ul>Picture
    6. 6. So Who is that Guy?
    7. 7. If you search for the word “Mercury” on the what would you get? Hg Browsing the Web (Content—without Context) quiz
    8. 8. Change in the supply chain is powerful The EDI model The e-business model The efficiencies driven from / in supply chains are significant . Not all will survive. Each has an EDI model that is costly. Channel has a common model e-business
    9. 9. The Range of what is under development today………... ACORD ANX RosettaNet FpML CHEMX “Verticals” (Industry Supply Chains) there are others……. e-business HR CRM AM “Horizontals” (Infrastructure) there are others…..
    10. 10. What is XML? <ul><li>Published as a recommendation by the W3C (World Wide Web Consortium) in early 1998. </li></ul><ul><li>Uses tags to give context and structure to the content </li></ul><ul><li>Provides a common way for disparate systems to exchange specific information (application integration) </li></ul><ul><li>Provides a means to separate data from style (so a single source can be output for multiple uses) </li></ul><ul><li>Separates data from logic of applications (so that it can be reused for multiple purposes). </li></ul>e-business
    11. 11. So when will this happen?? <ul><li>Never. </li></ul><ul><li>After I retire. </li></ul><ul><li>Before I retire but too late for me to have to worry about it. </li></ul><ul><li>Sooner than I want to admit, but I still have enough time to procrastinate. </li></ul><ul><li>Next five years. </li></ul><ul><li>Next two to three years . </li></ul>e-business
    12. 13. CFO Magazine on Investor Relations <ul><li>&quot;The explosive growth of the internet is not only changing the way companies conduct their business, it also promises to forever alter the way they communicate business performance. … Information availability may soon determine which companies benefit from market insight and which are hurt by market ignorance.” </li></ul><ul><li>- CFO magazine , February 2000. </li></ul>App to fin rep
    13. 14. Another Quiz? <ul><li>What word goes in the space? </li></ul><ul><li>“_____?____ is the language of business” </li></ul><ul><li>“_____?____is the language of e -business” </li></ul>XBRL - Why Accounting XML
    14. 15. The Internet Enablement of Reporting XBRL = e X tensible B usiness R eporting L anguage A new economy language for business information, reporting and analysis. App to fin rep
    15. 16. XBRL Working Model: Planned Specifications External Financial Reporting Business Operations Internal Financial Reporting Investment and Lending Analysis Processes Processes Participants Participants Auditors Trading Partners Investors Financial Publishers and Data Aggregators Regulators XBRL for G/L Journal Entry Reporting XBRL for Regulatory Filings Today XBRL for Financial Statements XBRL for Audit Schedules XBRL for Credit Filings XBRL for Business Event Reporting Software Vendors Management Accountants Companies XBRL - What
    16. 18. What software ‘sees’ is the differentiator and drives benefits (here is an example) ......Program FilesXBRL Demo XBRLDemo . xls
    17. 19. How to get the demo <ul><li>http://data.research.freeedgar.com/xbrl/demo/xbrldemo.htm. </li></ul><ul><li>URL has all of the instructions/steps for installing. </li></ul><ul><li>The only tricky part would be installing the MSXML parser. </li></ul><ul><li>You can get that from msdn.microsoft.com/xml. </li></ul><ul><li>Need Excel, MS Access2000 , pc, electricity, ….. </li></ul>
    18. 20. Financial Institutions—and their Users <ul><li>SMALL BUSINESS provides FINANCIAL INSTITUTION with their information in XBRL and receives loan approval in less than a day instead of two days—or two weeks. </li></ul>With XBRL? More Time for Analysis => Better Analysis => Less Risk Value-added Analysis and Decision-making? Your Client: Average Time for Loan Processing—1.75 days 90% + time spent on Data Discovery and Mechanics Mechanics Analysis Mechanics Analysis Mechanics Analysis Mechanics Analysis Or Process more loans in the same amount of time XBRL - Why Mechanics <10%
    19. 21. Key XBRL Components <ul><li>XBRL / XML Specification (XBRL.org) </li></ul><ul><ul><li>Global architecture/technology </li></ul></ul><ul><li>XBRL hierarchical vocabulary (jurisdiction/industry) </li></ul><ul><ul><li>Dictionary of terms by jurisdiction/industry sector </li></ul></ul><ul><li>Style Sheets (preparer) </li></ul><ul><li>XBRL enabled tools (market) </li></ul>XBRL - What
    20. 22. So What??…. ‘show me the money’ <ul><li>Reduces cost to publish information </li></ul><ul><li>Significantly reduces cost to use the information </li></ul><ul><li>Increases the speed of use and related decisions </li></ul><ul><li>New concepts of using existing financial information…. </li></ul><ul><ul><li>Virtual documents </li></ul></ul><ul><ul><li>Comparison of all components, including disclosures </li></ul></ul><ul><ul><li>Linkage to ‘related’ topics </li></ul></ul>XBRL - Why
    21. 23. What might this enable? <ul><li>User reporting/analysis on a personalized basis . </li></ul><ul><li>Agents monitoring key indicators . </li></ul><ul><ul><li>What is your temperature and blood pressure right now? </li></ul></ul><ul><li>More relevant reporting in the dawning of the ASP/outsourcing environment. </li></ul><ul><ul><li>How many routers did Cisco manufacture last year? </li></ul></ul><ul><li>Virtual closings . </li></ul><ul><li>Enhanced insights and transparency. </li></ul><ul><li>Quicker, Cheaper and faster decisions. </li></ul>XBRL - Why
    22. 24. The Growing XBRL Family
    23. 26.                                                                                                                                                                   
    24. 27.                                                                                                              
    25. 28.                                                                                                                                                                                                                                                                                                  
    26. 29. XBRL and Auditing; What Changes? <ul><li>XML provides the potential for additional information </li></ul><ul><li>XBRL creates nothing new </li></ul>
    27. 32. Auditing Systems Using XBRL <ul><li>I. Planning, Implementing and Maintaining an Integrated Audit Program - Integrated Auditing Defined - Integrating the Audit Group (IS and Financial) - Integrated Audit Planning Procedures - Risk Assessment Procedures and Techniques </li></ul>
    28. 33. Auditing XBRL Systems <ul><li>II. Mainframe Systems Software and Control - Operating System Concepts - Security Applications (ACF2, RACF) - Database Software (IMS, DB2) - Operations Software (Librarian, Schedulers, Change Control) </li></ul>
    29. 34. Auditing XBRL Systems <ul><li>III. Audit of the Systems Development Process - General Controls within System Development Process - Audits of Development Groups - Auditing Purchased Systems - Auditing In-house Development Systems - Linking SDLC Audits to Integrated Application Audits </li></ul>
    30. 35. Auditing XBRL Systems <ul><li>IV. Advanced General Control Audits - Mainframe Audit Program - Audit of the DBA Function - Audits of the Technical Support Areas </li></ul><ul><li>V. Audit and Control of the LAN & Database Environment - Understanding Dbase Controls - Database Security - Database Backup and Control - Using Database Tools - LAN Administrative Issues </li></ul>
    31. 36. Auditing XBRL Systems <ul><li>VI. Audit's Role in Pre-Implementation Projects - Relating Pre-implementation Reviews to General Controls - Audit Methodology for Pre-Implementation Audits </li></ul><ul><li>VII. Advanced Application Auditing - Auditing Integrated Application - Structured Auditing -- Using Forms and Automated Workpapers - Advanced CAAT TEchniques - Using Audit Command Language (ACL) </li></ul>
    32. 37. Is Auditing Different With XBRL? <ul><li>It Depends on </li></ul><ul><ul><li>Representation of financial information </li></ul></ul><ul><ul><ul><li>Who is relying on the data and why </li></ul></ul></ul><ul><ul><li>How are the XBRL tags applied </li></ul></ul><ul><ul><li>Validity of the taxonomy used </li></ul></ul>
    33. 38. Is Auditing Different With XBRL? <ul><li>Special Needs </li></ul><ul><ul><li>Care and feeding of Instance documents </li></ul></ul><ul><ul><li>Updating Taxonomies </li></ul></ul><ul><ul><li>Audit Scope Issues </li></ul></ul>
    34. 39. Three Levels of Understanding <ul><li>Auditing of XBRL financial statements requires understanding: </li></ul><ul><ul><li>The system that created the numbers </li></ul></ul><ul><ul><li>The XBRL taxonomy that mapped the financial system </li></ul></ul><ul><ul><li>The Instance of XBRL document that is used to create reports </li></ul></ul>
    35. 40. XBRL: the business reporting supply chain and audit impacts Neal Hannon, Co-Chair XBRL Education Committee Bryant College XBRL Educational Resource Center

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