The document summarizes a conference on revamping the audit approach using XBRL-tagged accounting equation data. It discusses modeling the audit using a "top-cycle" approach, developing a domain-specific language for auditing, and applying XBRL tagging to all phases of a new 5-phase audit process for continuous, real-time auditing and reporting. The conference brings together academics and practitioners to advance this new computational auditing approach using XBRL data processing and modeling.

1. 5th University of Kansas
International Conference on XBRL
Transparency, Assurance, and Analysis
Revamping the Audit Approach using
Accounting Equations:
Processing XBRL-tagged Data in
an XBRL-tagged Top-cycle
Philip Elsas, ComputationalAuditing.com
Paul Klint, CWI.nl
Trevor Stewart, Deloitte & Touche
Rajendra Srivastava, University of Kansas
Hans Blokdijk, Limperg Institute
Miklos Vasarhelyi, Rutgers University
Overland Park, Kansas April 28-30, 2011

2. 2
Top-cycle as Model for XBRL Assurance
ComputationalAuditing.com

3. 3
Why a model for XBRL assurance?
• To avoid a too complicated and too flexible language
• Model-based closure around XBRL assurance language
• Top-cycle auditing model guides design of
Domain-Specific Language (DSL) for XBRL assurance
• Tagging framework for both data and operators
• Model-driven auditing for real-time trust
ComputationalAuditing.com

4. 4
Wholesale Trading Enterprise,
Elementary Top-cycle Model
AccRec: AccRec[B] + SP * Sales – AccRec[E] → CashRcpt
Inv: Inv[B] + Pur – Inv[E] → Sales
AccPay: AccPay[E] + CashDisb – AccPay[B] → PP * Pur
Cash: Cash[B] + ColVAT + CashRcpt – PayVAT – Cash[E] → CashDisb
VAT: VAT[E] + VPP * Pur + PayVAT – VSP * Sales – VAT[B] → ColVAT
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5. Top-cycle model as Diagram 5
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6. 6
Top-cycle model
as Matrix
ComputationalAuditing.com

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Revamped Audit Approach: 5 phases
“Next Generation Auditing: Data-Assurance as a Service”
1. Mining ‘As Is’, actual top-cycle process model
2. Identify ‘To Be’, normative top-cycle
3. Continuous Auditing: continuous confrontation to norm
4. Dempster-Shafer-Srivastava method for aggregation
5. Publish deviation top-10 on interactive dashboard
ComputationalAuditing.com

8. 8
Phase 1:
Process Mining
ComputationalAuditing.com

9. Phase 2: Identify norm in ‘As Is’ 9
A
B
D
C
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10. Phase 2: Resulting in normative top-cycle 10
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11. Revamped Audit Approach: applying 11
XBRL tagged data & operators in all 5 phases
Topcycle-embedded Audit Assertions
XBRL
US GAAP
Taxonomy
ComputationalAuditing.com

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Design & Development of a
Domain-Specific Language
for Auditing
A software engineer's view:
● DSL captures domain knowledge
● DSL leads to 10-50x increase in software
productivity

13. Domain Knowledge 13
Auditor: 20 words for debt
Inuit: 20 words for snow
Th. Limperg
Anon. Inuit
Woman
Words capture essential domain knowledge:
describe them in feature model/ontology/...
and use as basis for DSL design

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DSL realization
Use meta-programming to
Use meta-programming to
compile DSL to (Java-based)
Design of
Design of compile DSL to (Java-based)
service implementations
service implementations
auditing DSL
auditing DSL
DSL
DSL
Compiler
Compiler
Implements
(See rascalmpl.org) Software services for
Software services for
mining/checking/
mining/checking/
visualization/...
visualization/...

15. Scoping our DSL
15
●
XBRL Formula
●
Continuity
equations
●
XBRL ontologies
●
Audit planning
●
Process mining questionnaires
●
Dempster- ●
Reporting with
Shafer-Srivastava drill down
Let's bring the benefits of a DSL
Let's bring the benefits of a DSL
to the auditing domain and profit from
to the auditing domain and profit from
the power of meta-programming
the power of meta-programming
languages like Rascal
languages like Rascal

16. Invitation to team up on R&D projects 16
What’s in it for an audit firm?
• Avoid overlapping investments
• ROI: ensure connecting R&D and relevant know how
What to bring to the table?
• Proposal on pilot studies
• Client accompanying you in pilots
• Time commitment of audit expert
Top 3 proposals are rewarded with team-up
connecting to your audit practice
ComputationalAuditing.com

17. Golden opportunity for Ernst & Young 17
Extend E&Y CARAT project proposal on audit tools &
techniques by inclusion of pilots on owner/franchisor
oriented audit approach with E&Y audit clients:
• McDonald’s - global franchisor-franchisee
• Twinfield - no.1 in online accounting
Build on successful project of Twinfield for McDonald’s
http://www.vanoers.nl/Home/Diensten/Accountancy/Adviseurvoorfranchisenemers.aspx
& include support of subcontractors in pilots:
• Chris Nedza - CEO of ZeeZor, real-time relation
franchisor-franchisee: revenue completeness
• Anne Rozinat - Fluxicon, process mining
ComputationalAuditing.com

18. Current considerations 18
Finalize as white paper for China’s Ministry of Finance,
Accounting Regulatory Department - advised by
Fou-Khan Tsang, board member of SRA INAA:
• China is on the outlook for alternative audit approach
• Excellent appreciation of ownership orientation
• Top-cycle concept has high yin-yang quality
India – current EY CARAT collaboration is springboard
Netherlands – establishing platform for internationalizing
proven Equational Audit Approach: integrated approach
for owner-ordered and management-ordered auditing
ComputationalAuditing.com

19. 19
Your
questions,
or advisory comments
PhilipElsas@ComputationalAuditing.com
ComputationalAuditing.com