Accounting Inside XBRL December 2011.


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Discover the wealth of accounting information packed into the US GAAP XBRL taxonomy. This PP will show you free ways to tap into the best available accounting reference service ever!

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Accounting Inside XBRL December 2011.

  1. 1. What Every Accountant Can Learn from XBRL Neal J. Hannon, CMA (inactive) University of Kansas Department of Accounting & Information Systems Florida Institute of CPA’s December 2011 1
  2. 2. SpeakerNeal Hannon, CMA (inactive) Lecturer, Accounting & Information Systems at University of Kansas Member of XBRL-US since 2000 Many XBRL articles, speeches, panels, andpresentationsConsultant toFujitsu, IBM, Webfilings, Altova, Rivet, EDGAROnline, XBRL Cloud, Financial AccountingFoundation, FASB and others 2
  3. 3. The Franciscan Roots of Modern AccountingFirst surviving accounting textbook:“The Summa” written by Fra. Luca Pacioli in 1494 (included illustrations by L. Da Vinci) A best seller in its day Publicized the Method of Venice Helped to spread literacy in the middle classLuca Pacioli—the ―Father of Accounting‖A mathematician and merchantBecame a Franciscan friarFranciscans came out of, and ministered to, merchant classDid not invent double-entry accounting but spread the knowledge
  4. 4. The Method of Venice(Double-entry Accounting)A binary (0,1) method for recording economic eventsInvention of the “Debit” and “Credit” concepts from the Italian terminologyAllowed for much easier addition and subtraction before calculators were inventedDebitComes from the Italian ―debito‖which comes from the Latin “debita” and “debeo”which means: OWED TO the proprietor or an asset of the proprietorCreditComes from the Italian ―credito‖which comes from the Latin “credo”which means: Trust or belief (in the proprietor) or OWED BY the proprietor
  5. 5. From the 13th century to the present:Double-entry accounting spread throughout the worldAccountants in each country adapted accounting practices to suit their: Cultures Laws & regulations Capital market structures EnvironmentsNational differences in accounting rules and practices render financial statements of companies based in different countries UNCOMPARABLE
  6. 6. Securities Act of 1933 Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives:  require that investors receive financial and other significant information concerning securities being offered for public sale; and  prohibit deceit, misrepresentations, and other fraud in the sale of securities.
  7. 7. Securities Exchange Act of 1934 With this Act, Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nations securities self regulatory organizations (SROs).
  8. 8. Sarbanes-Oxley Act of 2002 On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, which he characterized as "the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt." (the 1930’s) The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures, combat corporate and accounting fraud Created the "Public Company Accounting Oversight Board," also known as the PCAOB, to oversee the activities of the auditing profession.
  9. 9. First SEC Mention of XBRLXBRL Committee Encouraged by SEC Chairman Arthur Levitts Recommendation That It be Expanded and Used by Investors and CompaniesBusiness Wire, Oct 30, 2000Business EditorsNEW YORK--(BUSINESS WIRE)--Oct. 30, 2000In remarks last week, Arthur Levitt, Chairman of the Securities Exchange Commission (SEC),acknowledged XBRL and recommended its further development to turn financial statementsinto meaningful information for investors using this new revolutionary technology.Chairman Levitts remarks were made at the American Institute of Certified PublicAccountants (AICPA) Fall Council Meeting in Las Vegas, Nevada on October 24, 2000.
  10. 10. Former Chief AccountantLynn Turner: “I support XBRL. I wrote the comment for chairman Levitt’s speech. But please tell everyone you talk to about XBRL that you must Get the Accounting Right!‖
  11. 11. AccountingGoes Digital
  12. 12. Do You Remember Vinyl Records? Had to Play from start to finish Record could be damaged if you attempted to play a specific track.
  13. 13. Vinyl Records And DisclosuresSimilarly , Financial statements, notesand disclosures today are meant to be readand understood as a whole. Audit opinionsare given on the entire set of financials. Thepaper-based, report centric world lives on.
  14. 14. Then Came Digital Music•Individual Tracks Separated•Choose Your Own Order for Play•Start and StopThe technology dramatically changed how we relate to musicand gave us more power to select individual cuts suited tomusical tastes and preferences
  15. 15. What can digital data do?
  16. 16. George Martin and the Beatles The task  Collect, identify, classify the entire set of music created by the Beatles  Using master tapes, break out the riffs  Re-configure music into digital sound bytes The results  New Music.. The Beatles Love Album
  17. 17. George Martin and the Beatles The task  Collect, identify, classify the entire set of music created by the Beatles  Using master tapes, break out the riffs  Re-configure music into digital sound bytes The results  New Music.. The Beatles Love Album
  18. 18. The SEC and Interactive Data The task  Collect, identify, classify the entire set of GAAP created by US Authoritative Sources of GAAP  Using financial statement hierarchy, break out the elements into an XBRL taxonomy  Re-configure accounting into digital bytes The results  New Filings.. The SEC Interactive Data initiative in XBRL
  19. 19. Digital datafundamentally changes the paper-basedreporting paradigm
  20. 20. Who is using XBRL ?• Federal Deposit Insurance Corporation (FDIC) went live with its XBRL system in 2005, and has since reduced errors from 18,000 to zero, with an estimated savings of $26 million over the next ten years.• The Dutch Government went live in 2007 and expects to save $345 million annually as a result of implementing XBRL.• The Australian Tax Office is implementing XBRL and expects to save $780 million (Australian) per year.
  21. 21. XBRLNot just for the SEC
  22. 22. Scope and Role of XBRL XBRL for G/L XBRL for Financial Journal Entry Statements Reporting Interna Externa Investme l l nt, EconomicProcesses Business Financi Financi Lending, Policyma Operations al al Regulati king Report Reporti on ing ng XBRL XBRL XBRL XBRL Financial Publishers Central Companies InvestorsParticipants and Data Banks Aggregators Trading Management Auditors Regulators Partners Accountants Software Vendors
  23. 23. Who is using XBRL ?Kim Wallin, Controller, State of Nevada In 2007, Wallin begin considering XBRL as a solution to grant reporting, and when the Department of Agriculture asked for help with their reporting, Deloitte was brought in and two of Agricultures grants were selected for the XBRL pilot.
  24. 24. "The goals were timely and accurate data,“ said Wallin, "stronger internal controls,reduced costs, a standardized system ofseamless data exchange, business processesand data elements. XBRL met allof those goals."
  25. 25. XBRL Does NOT Change management’s accounting decisions. Require either more or less disclosure than companies are currently experiencing Restrict companies to using elements in the taxonomy (data dictionary) only.
  26. 26. Have you ever wondered which specific US GAAPauthoritative literature stands behind each item onyour company‘s SEC disclosures? A US GAAP XBRL Taxonomy haEver wonder how accounting experts mightdefine each key item on your SEC 10K? A US GAAP XBRL Taxonomy ha
  27. 27. XBRL BASICS Accountants: Industry experts have developed a data dictionary, or taxonomy that covers US GAAP reporting requirements to the SEC The taxonomy will has labels, definitions, and references to authoritative literature organized in a reporting hierarchy in addition to computer codes in XBRL.
  28. 28. Analysts Current Investors Reporting Practice CFO Investor Relations GAAP, SEC RegulationsCodification project Audit check lists US GAAP Taxonomy XBRL Development Effort protocols FAF, XBRL USKey concept:Create a Data model Internal and public Taxonomy testing Release
  29. 29. XBRLThe Accounting’s Inside
  30. 30. Standard LabelStandard label in English:Revenue Recognition AccountingPolicy, Gross and Net RevenueDisclosureStandard label in XBRL:RevenueRecognitionAccountingPolicyGrossNetRevenueDisclosure 34
  31. 31. DefinitionDescription of accounting policies associatedwith the recognition of gross revenues and grossrevenue adjustments, which are components ofnet revenues in the statement of operations forthe period. 35
  32. 32. Authoritative ReferenceAccounting Principles Board Opinions(APB)Number 22, Paragraph 8 36
  33. 33. Will the Meta Data Count? So.. If a filing contains a label that is further described by a definition and a reference, the computer referencing the item will have all three pieces of information as discoverable meta data  Label  Definition  Reference If the definition is off or the reference is wrong, is the tagged data also wrong? What if an investor, reading the XBRL meta data, relies on the XBRL definition or reference? Shouldn’t the entire financial information supply chain care about the triad of accounting?
  34. 34. Will the Meta Data Count? XML is a wonderful language for describing objects in computer readable formats. XML depends on meta data to describe the contents of its digital message. XBRL must contain several attributes in order to transform numbers into meaningful business reporting interactive data. When we move from a paper based reporting world to an interactive data world, the data contained in a finding will not be complete or understandable without accurate meta data accompanying the element reported.
  35. 35. PrinciplesGAAP accommodates variation in applied accounting methods as long as the methods generally conform to GAAP’s set of principles…..This drives computers crazy!
  36. 36. Basic XML Concepts & Terminology Anatomy of XML element <CostOfGoodsSold>101000000</CostOfGoodsSold > Starting tag = <CostOfGoodsSold> Ending tag = </CostOfGoodsSold> Element name or element-type = CostOfGoodsSold [no spaces and case sensitive] Element content = 101000000 43
  37. 37. Basic XML Concepts & Terminology Need for attributes What are the problems with the following elements?  <price>34.50</price>  <receipt_date>05/04/2008</receipt_date> Adding attributes <price currency=“USD”>34.50</price> <receipt_date date=“ISO 8601”>2008-05- 04</receipt_date> 44
  38. 38. A Remaining Problem (Implied vs. explicit) Company Property, Plant and Sales Cost of Goods Equipment Sold Staples Total property and Sales Cost of goods sold equipment and occupancy costs ExxonMobil Property, plant, and Total revenue Crude oil and equipment, at cost, less and other product accumulated income purchases depreciation and depletion Intel Property, plant and Net revenue Cost of sales equipment, net Fixed assets, net Net sales Cost of sales IBM Plant, rental machines and Total revenue Total cost other property Wal-Mart Property and equipment, net Net sales Cost of sales Source: company annual reports 45
  39. 39. Where XBRL Comes In 46
  40. 40. Some XBRL Terms Context GrayCo Income StatementLabel Year ended Dec 31, 2008 Attribute (millions) 2008 2007 Sales $ 145 $ 132 Cost of Goods Sold 101 92 Gross Profit 44 40 Sales, general, and Value 10 8 administrative Net Income $ 34 $ 32 47
  41. 41. What XBRL is based on .. XML Specifications BuildsModules XBRL SpecificationBind toDomain Taxonomy Builds Instance Document 48 48
  42. 42. THE XBRL Specification 2.1 The XBRL Specification provides the fundamental technical definition of how XBRL works. The spec defines XML elements and attributes that can be used to express information used in the creation, exchange, and comparison tasks of business reporting. XBRL consists of a core language of XML elements and attributes used in XBRL instances as well as a language used to define new elements and taxonomies of elements referred to in XBRL instances, and to express constraints among the contents of elements in those XBRL instances. Only one specification for the whole world 49
  43. 43. Taxonomies• A Taxonomy is a dictionary of financial reportingterms or concepts•The concepts captured in a taxonomy are referredto as ELEMENTS. These Elements form the core ofXBRL.• Separate Taxonomies are developed for differentreporting purposes such as US GAAP, IFRS, bankregulatory reporting. etc 50
  44. 44. Anatomy of an XBRL Element Financial XBRLReporting Concept Element 51
  45. 45. Anatomy of an XBRL Element 52
  46. 46. Anatomy of an XBRL Element 53
  47. 47. COUNTRY / JURISDICTION TAXONOMY LEVEL STATUSCanada GAAP Primary Financial Statements Ack Draft Notes to Financial Statements Ack DraftChina China Listed Company Taxonomy Framework Ack Draft China Fund Company Taxonomy Framework Ack Draft China Financial Listed Company Information Disclosure Taxonomy Ack DraftIASB IFRS General Purpose, 2005 rules Ack Final IFRS General Purpose, 2004 rules Ack Final IFRS General Purpose, 2003 rules Ack DraftInternational Global Common Data Taxonomies Ack DraftIreland GAAP Commercial and Industrial Ack Draft Israeli Annual and Periodic Reports General Purpose Financial Reporting, extension for International Financial Reporting Standards (IL-IFRS-Israel GP) Ack DraftJapan EDINET Taxonomy Ack FinalKorea GAAP Primary Financial Statements Ack DraftNew Zealand GAAP Commercial and Industrial Ack DraftSpain General Data Idenfication Ack FinalThailand Listed Companies - Banking Services Ack Draft Listed Companies - Commercial and Industrial Ack Draft Listed Companies - Securities Companies Ack Draft Ack 54 DraftUnited Kingdom GAAP Commercial and Industrial
  48. 48. COUNTRY / JURISDICTION TAXONOMY LEVEL STATUSUnited States GAAP - Investment Management App Final XBRL US Accountants Report Taxonomy 1.0 Ack Final XBRL US Country Taxonomy 1.0 Ack Final XBRL US Currency Taxonomy 1.0 Ack Final XBRL US Document and Entity Information Taxonomy 1.0 Ack Final XBRL US Exchange Taxonomy 1.0 Ack Final XBRL US GAAP Taxonomy 1.0 Ack Final XBRL US Managements Discussion and Analysis Taxonomy 1.0 Ack Final XBRL US Management Report Taxonomy 1.0 Ack Final XBRL US North American Industrial Classification System (NAICS) Taxonomy 1.0 Ack Final XBRL US SEC Certification Taxonomy 1.0 Ack Final XBRL US Standardized Industrial Classification (SIC) Taxonomy 1.0 Ack Final XBRL US State-Province Taxonomy 1.0 Ack Final GAAP - Commercial and Industrial (superseded by the 2008 version) App Final GAAP - Banking and Savings (superseded by the 2008 version) App Final GAAP - Insurance (superseded by the 2008 version) App Final GAAP - Brokers and Dealers (superseded by the 2008 version) Ack Draft GAAP - Pensions (superseded by the 2008 version) Ack Draft SEC Certification (superseded by the 2008 version) App Final Management Report (superseded by the 2008 version) App Final Accountants Report (superseded by the 2008 version) App Final MD&A (superseded by the 2008 version) App Final 55
  49. 49. Extension Taxonomies Why you might need an extension taxonomy 1. You want to include a financial statements item not in the standard taxonomy you are using. 2. Changing a label for a standard base taxonomy to match your label name 3. Changing the presentation structure of one or more standard base taxonomy elements to match the presentation structure of your report. 4. Changing the calculation structure of one or more standard base taxonomy elements to match the calculation structure of your report. 56
  50. 50. Taxonomies and Extensions can be thought of asthe building blocks for XBRL reporting First Raleigh Company Specific Terms Bank Terms US GAAP Bank Terms Industry Terms US GAAP FS Terms US GAAP Foundation Terms Primary Terms
  51. 51. XBRL Linkbases Definition linkbase: Indicates for each concept whether it is a special case of some other defined concept. Calculation linkbase: Indicates how one concept in a group of “sibling” concepts is related to the value of their parent concept. Presentation linkbase: Indicates the order in which each concept should be presented when grouped with its siblings. Label linkbase: Associates each concept with one or more presentation labels, one per language. Reference linkbase: Associates each concept with one or more places in authoritative literature where the concept is defined. Dimension linkbase: Captures detailed information about the horizontal and vertical axes of a table in a note to the financial statements. 59
  52. 52. Instance Documents• An Instance Document is your XBRL financialreport• Instance Documents will include: • Values (ex. numbers, blocks of text etc) • Tags to identify the values • Taxonomy references – Telling you where the tags are defined • Context – Information describing the reporting entity and period • Units/Measure – Information on unit of measure, currency etc. 60
  53. 53. Company Financial Statement XBRL Taxonomy Created by XBRL Consortium TAGGING Creation XBRL XBRL Document Created by Preparer AT 101 Assurance 61
  54. 54. Software Used Six Steps to XBRL , Journal of Accountancy, Feb. 2008 65 65
  55. 55. XBRL:A World-WidePhenomenon 66
  56. 56. Services architecture leveraging taxonomies Transaction and or subsidiary Viewing and aggregation for Data department & management Controls ‗Wrap & Map‘ACORDXBRL GL ControlsACORD XBRL Web SeniorXBRL GL Services Management ControlsACORD ControlsXBRL GL Controls Controls 81
  57. 57. The Answer - XBRL GL System 1 System 2 System 3 XBRL GL XBRL GL XBRL GL Account# Account Number Identificador de la Cuenta accountMainID accountMainID accountMainID Description Account Description Descripción Principal de la CuentaaccountMainDescription accountMainDescription accountMainDescription Amount Entry Amount Monto Monetario amount amount amount PostDate Posting Date Fecha de Asignación/Ingreso postingDate postingDate postingDate 82
  58. 58. Putting it all together:What are the opportunitiesfor CPAs?
  59. 59. Providing XBRL services:Still many unknowns/questions/issues! 84
  60. 60. Introduction to Opportunities Advisory Services Assurance Services Agreed-upon Procedures Examination of an Assertion About XBRL-Tagged Data Examination of Controls Over the Preparation of the XBRL-Tagged Data AT Section 601, Compliance Attestation Review of an Assertion About XBRL-Tagged Data Center for Audit Quality [Alert #2009-55] 87
  61. 61. Advisory Services Assisting management in obtaining an understanding of XBRL, relevant requirements, implementation processes, and timetable Providing observations and recommendations to management on its XBRL project management plan, implementation process or supporting documentation prepared by the client  XBRL team members?  Outsourcing (filing agent)?  Software selection?  Timeline? Providing comments on the client’s mapping of its financial statements to the XBRL US GAAP Taxonomy 88
  62. 62. Preparing XBRL Documents for External Reporting  Recommend fire drill to client(s) to work out issues before filing is required:  Allocation of work between client, CPA, and 3rd parties  Degree of changes to face of financial statements to match standard taxonomy [could be zero]  Decide on block vs. detailed footnotes  Develop/implement/test/modify extension taxonomies  Develop plan for official filing based on fire drill results 89
  63. 63. Advisory Services: Warning… Avoid for audit clients…  Performing project management of the XBRL implementation project;  Selecting or recommending a specific software product for the client to use;  Mapping the client‘s financial statements to the XBRL US GAAP Taxonomy;  Designing a plan for the client to implement, or designing controls over that process;  Preparing a prototype of the client‘s financial statements using XBRL;  Providing ongoing support to management in tagging financial statements. 90
  64. 64. Assurance Independent auditor not required to have any role in XBRL exhibits in SEC filings. The following standards do NOT apply:  AU 550--Other Information in Documents Containing Audited Financial Statements,  AU 722--Interim Financial Information  AU 711--Filings under Federal Securities Statutes However, the client may request the audit firm perform procedures or report on the XBRL instance document… 91
  65. 65. Assurance Services Key components of audit/attestation/assurance engagement…  Subject matter  Client assertions about subject matter  Criteria  Attestation of client’s assertions about subject matter in compliance with criteria Paper financial statements vs. XBRL  What are the subject matters, assertions, criteria, and attestations?  Are they the same of different? (Yes, no, maybe!)
  66. 66. Assurance Issues Paper financial statements not same as XBRL instance document (different subject matter/criteria) Current audit opinion focuses on document level (fair view) XBRL document is a dataset, presentation via a style sheet, so no fair view? XBRL needs assurance on data- level No taxonomy for the audit opinion or guidance how to connect the opinion to an instance document, could be the FS No guidance yet about signing audit opinions and validations of the signature No audit tools (as opposed to validation tools) available for analyzing instance documents 93
  67. 67. Preparation & Assurance Questions 1 Was the appropriate standard taxonomy chosen based on the industry and applicable GAAP? Was the extension taxonomy properly created for new concepts and relationships not included in the standard taxonomy. Some related questions include:  Was a tag included in the extension taxonomy that already existed in the applicable standard taxonomy?  Are the customizations of labels, presentation order, and calculations, as captured in applicable linkbases, appropriate? 1List inspired by Eric Cohen CICA presentation, 2004 94
  68. 68. Preparation & Assurance Questions Is everything tagged that should be tagged? Was the most appropriate XBRL tag chosen for each fact or concept in the source document? Two general types of errors could occur here:  Judgment error  Mechanical error Were there tags in the standard taxonomy that would have been expected to be used, but were not used? Are contexts consistent and appropriate? 95
  69. 69. Audit Approach (AICPA) “Attest Engagements on Financial Information Included in XBRL Instance Documents” (AT 9101.47–.54).52 …practitioner should consider performing include:• Compare the rendered Instance Document to the financial information.• Trace and agree the Instance Documents tagged information to the financial information.• Test that the financial information is appropriately tagged and included in the Instance Document.• Test for consistency of tagging (for example, an entity may use one taxonomy tag for one year and then switch to a different tag for the same financial information the following year. In this case, the financial information for both years should use the same tag).• Test that the entity extension or custom taxonomy meets the XBRL International Technical Specification (for example, through the use of a validation tool). 96
  70. 70. PCAOB Guidelines (2005!) PCAOB published 11-page staff Q&A regarding XBRL on May 25, 2005. A3. An auditor may be engaged to examine and report on whether the XBRL-Related Documents accurately reflect the information in the corresponding part of the official EDGAR filings… under AT section 101, Attest Engagements, as amended. A4…the auditor must have sufficient knowledge of the applicable SEC Regulations, EDGAR Filer Manual requirements, and XBRL taxonomies and specifications to perform the examination. 97
  71. 71. PCAOB Guidelines Q5. What criteria…? A5. US GAAP Version 2.1…suitable criteria [however] Company extensions of those taxonomies normally do not go through the same development processes as [standard taxonomies]. Accordingly, the auditor should evaluate whether company extensions represent suitable and available criteria as described in AT section 101. 98
  72. 72. Agreed-Upon Procedures Firm’s report identifies procedures performed and results. Report does not express an opinion and makes no representations regarding the sufficiency of the firm’s procedures. Report is restricted to the client and the named parties who have agreed to the procedures & accepted responsibility for the sufficiency for their purposes. It is not appropriate for companies to refer to services in a publicly available document
  73. 73. Examination of an Assertion about XBRL- Tagged Data SEC Rules note that issuers can obtain third-party assurance under the PCAOB Interim Attestation Standards, AT section 101  AT 9101.47–.54 suggests rending, but this procedure alone does not sufficiently address the risk that errors could exist in the tagged financial information. Criteria: SEC Rules and the XBRL US GAAP Taxonomy Preparers Guide  What about extension taxonomies? Are they subject matter or criteria?  What about highly-technical XBRL Specification 2.1? What content? How do you decide? Skills? Specialist? How is materiality assessed? Document as a whole vs. line-by-line? 100
  74. 74. Examination of Controls Over the Preparation of XBRL-Tagged Data Not likely to be a stand-alone service Probably conducted in conjunction with other XBRL services Client’s focus is on just delivering an accurate & complete XBRL document [controls and efficiency are secondary for now] Because XBRL document creation is bolt-on (after-the- fact), tagging is typically not part of a company’s SOX 404 internal control over financial reporting [but that could change in the future] 101
  75. 75. AT Section 601, Compliance Attestation AT section 601 provides guidance on performing an examination or agreed-upon procedures engagement related to:  An entitys compliance with the requirements of specified laws, regulations, rules, contracts, or grants or  The effectiveness of an entitys internal control over compliance with specified requirements. SEC Rule 405 of Regulation S-T imposes certain content, format, submission and posting requirements that an entity’s compliance could be evaluated against. However, the EDGAR Filer Manual includes highly detailed, technical information; as such, audit firms should consider carefully whether they have the technical expertise to perform such compliance services. 102
  76. 76. General Requirements under SEC Rule 405 Regulation S-T Information in interactive data format should not be more or less than the information in the ASCII or HTML part of the report Use of the most recent and appropriate list of tags released by XBRL U.S. or the IASCF as required by EDGAR Filer Manual. Viewable interactive data as displayed through software available on the Commission’s Web site, and to the extent identical in all material respect to the corresponding portion of the traditional format filing Data in the interactive data file submitted to SEC would be protected from liability for failure to comply with the proposed tagging and related requirements if the interactive data file either  Met the requirements; or  Failed to meet those requirements, but failure occurred despite the issuer’s good faith and reasonable effort, and the issuer corrected the failure as soon as reasonably practical after becoming aware of it. 103
  77. 77. Review of an Assertion about XBRL-Tagged Data Generally consist of inquiries and analytical procedures designed to provide a moderate level of assurance (i.e., negative assurance). However, probably could not perform meaningful analytical procedures on XBRL-tagged data sufficient to achieve even this level of assurance and it is uncertain what other procedures could be identified that, when combined with inquiries, could form the basis for a review engagement. Accordingly, the feasibility of a review engagement related to XBRL tagging is uncertain. If a review engagement could be developed, it would be important for the review report to communicate its limitations to users. 104
  78. 78. Management Assertions (SAS 106) & Related Audit ObjectivesAssertions about account balances Audit Objectives  Existence  Validity  Completeness  Completeness  Rights and Obligations  Ownership  Valuation or Allocation  ValuationAssertions about classes of transactions and  Cut-off events  Classification  Occurrence  Disclosure  Completeness  Accuracy  Cutoff  ClassificationAssertions about presentation and disclosure  Occurrence and rights and obligations.  Completeness  Classification and understandability Based on research of Srivastava & Kogan 105
  79. 79. Risk Based Approach for Conceptualizing Assertions Data Deficiencies in the XBRL Instance Document  Omissions of relevant data from the traditional format documents (Completeness)  Insertions of data not present in the traditional format documents (Existence)  Erroneous element values and / or attribute values (such as context, unit, etc.) (Accuracy: Element Accuracy or Attribute Accuracy) 106
  80. 80. Risk Based Approach for Conceptualizing Assertions Deficiencies of the Mark-up in the XBRL instance Document  Erroneous tagging of data that violates XML syntax rules (Violation of Well-formedness)  Erroneous tagging of data that violates XML Schema (Violation of Validity)  Inappropriate choice of XBRL elements to tag traditional format document data (Violation of Proper Representation) 107
  81. 81. Risk Based Approach for Conceptualizing Assertions Deficiencies of XBRL Taxonomies used by the Filer  Improper choice of general and industry-specific XBRL taxonomies by the filer (Proper Taxonomies)  Violations of XML or XBRL language rules in XBRL taxonomy extensions by the filer (Valid Taxonomy Extensions)  Inappropriate introduction of new elements in XBRL taxonomy extensions (Proper Extension Elements)  Inappropriate / erroneous linkbases in XBRL taxonomy extensions (including the choice of inappropriate/misleading labels) (Proper Linkbases) 108
  82. 82. An Accounting Intro to XBRLAccounting can be found in the taxonomy • Accounting structure is in the linkbases • Definitions are explicit, not implied • Authoritative literature is linked • Taxonomy elements are highly vetted • FASB, SEC, Public reviews 109
  83. 83. Tools for Accounting•FASB‘s XBRL Yeti Tool•SEC‘s EDGAR site•SEC‘s XBRL site•XBRL US site•XBRL Cloud EDGAR Dashboard•FASB‘s Codification of US GAAP •Proposed XBRL for New ASC‘s•Smart Phone App BRIX 110
  84. 84. US GAAP Taxonomy 2011 111
  85. 85. Path to the Taxonomys Accounting •; click on FASB XBRL •Click on ―taxonomy view‖, then • ‗Entire 2011 US GAAP Financial Reporting Taxonomy‘ •Once there, type ―cash‖ into search box 112
  86. 86. FASB‘s XBRL 113
  87. 87. Yeti – A Taxonomy Reader 114
  88. 88. SEC‘s Interactive Data Site 115
  89. 89. XBRL US Site 116
  90. 90. XBRL Cloud‘s EDGAR DASHBOARD 117
  91. 91. The Codification of US GAAPUS GAAP was contained in over 12publications of official and semi-official GAAP prior to the 2005-7effort to place all US GAAP into anelectronic index called ACS.Access to the ACS is either publicor professional. Professionalaccess is a paid service. 118
  92. 92. Accounting Standards Codification 119
  93. 93. 120
  94. 94. SEC‘s EDGAR System 121
  95. 95. Starbucks 122
  96. 96. Starbucks 123
  97. 97. Starbucks 124
  98. 98. Starbucks 125
  99. 99. Starbucks 126
  100. 100. XBRL US Smart Phone App 127
  101. 101. AcknowledgementsMike Willis and Eric Cohen, Charlie Hoffman,PwC EDGAR OnlineYossef Newman, Walter Hamscher,Deloitte Standard AdvantageLiv Watson, Jan Pasmooij, Royal NIVRA,XBRL International NetherlandsRoger Debreceny, Clinton ―Skip‖ White,U. of Hawaii U. of DelawareRaj Srivastava, Glen Gray,U. of Kansas Cal State NorthridgeGreg Zegarowski, Financial Amy Pawlicki,Leadership Corporation AICPAPaul Penler, XBRL InternationalE&Y XBRL US Center for Audit Quality Apologies to anyone I missed. 128
  102. 102. Questions? Thank 129