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The Internal Use of XBRL for Continuous Auditing Purpose

Is XBRL an accelerator for CA in practice in The Netherlands?

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K.B.Khargi

Master Thesis Economics & Informatics

Economics & ICT programmeStudentID 275859EUR Supervisor Prof. Dr. G.J. van der Pijl 2nd Supervisor Ing. A.A.C. de Visser18 May 2011

Master Thesis Economics & ICT


Is XBRL an accelerator for CA in practice in The Netherlands?

Name: Kavita Khargi

Student ID: 275859

E-mail: [email protected]

[email protected]

Version: Final

Date: 18 May 2011

mailto:[email protected]

mailto:[email protected]


Acknowledgement

I thank my parents for stimulating me during my education and giving me space to succeed in

everything I was doing.

This thesis would not have been possible without the interviewees. I thank them for their

precious time, and for sharing their experience with XBRL with me: Willem Geijtenbeek, Huub

Lucassen, Jan Pasmooij, Paul Snijders, Hans Verkruijsse, and Jacques Urlus.

I thank my supervisor of the EUR Ad de Visser for guiding me throughout the whole process,

and for asking how I really was (and listen to the whole story). I thank Wim Pijls for an orienting

dialogue about XBRL.

When I was down-hearted and had absolutely no hope for my study I turned to the ESSC. I

really appreciate the help I got from Wendy Pelkmans, Sachlan Apil and Mr. B. den Boogert.

Furthermore I thank my friends and family for being patience when I was rude and moody

sometimes during the time I wrote this thesis.

Kavita Khargi

K.B. Khargi 275859 18 May 2011 1


Abstract

The motivation for this study has been the many papers on continuous auditing proclaiming

that XBRL would enable continuous auditing and accelerate its adoption.

In the Netherlands this seem to be not the case; XBRL is not even implemented within internal

processes of companies.

Therefore this research question was formulated:

What is needed in order to shift XBRL towards the front of the business reporting supply chain

for the purpose of continuous auditing in The Netherlands?

After a literature study and several interviews with experts the following was the result for the

conditions:

First a change in perspective of the way we look at accounting is needed.

Steps that companies have to take before implementing XBRL internally:

o Bear in mind what the stakeholders want; find out to whom the report is

important, the target group, and what information they are interested in.

With the focus on sustainability they want a dialogue, with an annual report not.

o Map the internal information need for all levels in the company

o Make a corporate data model with all databases that are used and clean

pollution in these databases; harmonize and synchronize all the different

definitions from several systems for one same concept.

o Map the lack of knowledge within the firm knowledge management. This also

includes what information exactly is given away to other parties with XBRL and

what are the consequences.

Software suppliers should take a more active role and not wait for what customers want.

K.B. Khargi 275859 18 May 2011 2


Table of Contents

1. Introduction................................................................................................................................................................. 51.1 Background........................................................................................................................................................ 51.2 Motivation...........................................................................................................................................................61.3 Research Objective..........................................................................................................................................7

1.3.1 Scientific Relevance..............................................................................................................................71.3.2 Business Relevance...............................................................................................................................8

1.4 Research Question...........................................................................................................................................91.5 Research Methodology...............................................................................................................................101.6 Thesis Construction.....................................................................................................................................11

2. XBRL............................................................................................................................................................................. 122.1 The purpose of XBRL...................................................................................................................................122.2 Two tiered design of XBRL........................................................................................................................132.3 Technical definition of XBRL....................................................................................................................142.4 Barriers for adopting XBRL......................................................................................................................152.5 Benefits of XBRL............................................................................................................................................172.6 Adoption of XBRL in different countries.............................................................................................18

2.6.1 XBRL adoption around the world...............................................................................................182.6.2 XBRL in The Netherlands.................................................................................................................20

2.7 XBRL Tooling.................................................................................................................................................. 213 Continuous Auditing..............................................................................................................................................22

3.1 What is Continuous Auditing?.................................................................................................................223.2 History of Continuous Auditing..............................................................................................................243.3 Benefits and issues of continuous auditing.......................................................................................253.4 Continuous auditing in The Netherlands............................................................................................253.5 Requirements for Continuous Auditing.............................................................................................263.6 Tools for Continuous Auditing................................................................................................................27

4 XBRL and CA in the Business Reporting Supply Chain...........................................................................284.1 Business Reporting Supply Chain..........................................................................................................284.2 XBRL-GL: an enabler for CA?....................................................................................................................304.3 What features XBRL to be an enabling factor for CA?..................................................................31

5 Standard Business Reporting in The Netherlands...................................................................................335.1 What is SBR?....................................................................................................................................................33

5.1.1 The SBR standards.............................................................................................................................345.1.2 The SBR components.........................................................................................................................355.1.3 The SBR facilities.................................................................................................................................355.1.4 Filing reports with SBR....................................................................................................................36

5.2 Benefits of SBR to business.......................................................................................................................376 Empirical data.......................................................................................................................................................... 38

6.1 Top level interviews: chairpersons XBRL Netherlands...............................................................386.1.1 Interviewee1.........................................................................................................................................386.1.2 Interviewee2........................................................................................................................................426.1.3 Interviewee3.........................................................................................................................................45

K.B. Khargi 275859 18 May 2011 3


6.2 Middle level interviews: IT auditors.....................................................................................................506.2.1 Interviewee4........................................................................................................................................506.2.2 Interviewee5........................................................................................................................................566.2.3 Interviewee6........................................................................................................................................61

6.3 Bottom Level: Case studies.......................................................................................................................646.3.1 Wacoal.....................................................................................................................................................646.3.2 Project Basic-life.................................................................................................................................676.3.3 Microfinance Information eXchange (MIX).............................................................................69

7 Analysis....................................................................................................................................................................... 727.1 Internal use of XBRL....................................................................................................................................727.2 Reluctance of firms......................................................................................................................................737.3 Benefits of the internal use of XBRL....................................................................................................757.4 Conditions........................................................................................................................................................ 777.5 Successes and failures.................................................................................................................................797.6 Continuous auditing and XBRL...............................................................................................................807.7 Tools................................................................................................................................................................... 837.8 Adoption of XBRL..........................................................................................................................................847.9 Current situation of XBRL in The Netherlands................................................................................857.10 Future.................................................................................................................................................................86

8 Conclusion..................................................................................................................................................................888.1 Main Findings................................................................................................................................................. 888.2 Research Limitations...................................................................................................................................908.3 Recommendations for further research..............................................................................................908.4 Lessons Learnt............................................................................................................................................... 91Bibliography...................................................................................................................................................................92

Appendix: Questionnaire.............................................................................................................................................. 95

K.B. Khargi 275859 18 May 2011 4


1. Introduction

In this chapter the motivation of this research is presented. Then the research objective is given.

The research question and sub questions are described in section 1.3. The methodology is

presented in section 1.4. Finally, the construction of this thesis and its further chapters are

briefly mentioned.

1.1 Background

Auditing has experienced a major shift in automation over de last past decades. Traditionally,

internal audit has been performed on a retrospective and cyclical basis, most often months or

longer terms. The procedures of testing controls were often based on sampling and included

activities such as reviews of policies, procedures, approvals and reconciliations. But, this

approach gives internal auditors a narrow scope of evaluation that is often too late to be of real

value to the business performance or regulatory compliance (Coderre, 2005). But nowadays

pressured by new regulations and using new technologies, auditing has become almost a

continuous process. The focus has shifted from only financial information to information of risk

and control systems (Van Kuijck 2008)

In the early 1990s the business environment went through a series of substantial changes,

among which “electronization” was one of. Ever more auditors could no longer review source

documents in paper form (Bierstaker2001).The trend which caused the disappearance of the

traditional audit trail continued and online systems and the Internet created an easier and

cheaper way for data to be exchanged between systems, using the HTML protocol (Alles 2004).

But HTML documents were not suitable to be extracted and compared. Therefore a language

like XML, which adds information about the document’s content to its tags, was introduced.

In April 1998 Charles Hoffman applied XML to financial statements, in order to make financial

data machine readable (O’Rourke 2001; Plumlee 2008). The prototype was called XFRML

(Extensible Financial Reporting Markup Language). This was initially designed for external

reporting. Eventually, this evolved to version 1.0 of XBRL in July 2000. In 2005 XBRL

International published the XBRL-GL (Global Ledger) specification, this is for internal auditing.

The most recent version is XBRL Specification 2.1 (Bizarro & Garcia 2010).

K.B. Khargi 275859 18 May 2011 5


XBRL is useful for preparing, publishing, exchanging, acquiring and analyzing accounting and

business data, and provides a standardized method for transferring financial reporting

information between software applications (Alles 2004). XBRL enables continuous auditing by

placing financial data in a format which is not proprietary to any specific software application,

allowing any future continuous auditing system access to data on any software platform,

running any software (which uses XBRL), in any country ( Flowerday 2006).

Today XBRL has been adopted in countries worldwide. In some countries the adoption of XBRL

has made great progress and they have required reporting in XBRL by law. Some countries are

lagging behind and have reporting in XBRL enabled instead of required.

US SEC, reporting in XBRL is required

Belgium `Balanscentrale' (Chamber of Commerce) reporting in XBRL is required

China, Korea, Japan, XBRL is required

In almost any country of Western Europe, reporting in XBRL is enabled

Netherlands: Belastingdienst (Tax Services), Kamer van Koophandel (Chamber of

Commerce) and Centraal Bureau voor Statistiek (Central Bureau for Statistics) are XBRL

enabled.

(Pijls 2010)

1.2 Motivation

The motivation for this research was a result from a previous study about continuous auditing

and continuous monitoring. During the literature study of that research the term XBRL was

mentioned in some papers about continuous auditing. After following a course where XBRL was

treated in one lesson, the interest arose to conduct further research.

In various papers XBRL is mentioned to be an enabler, a facilitator for continuous auditing, and

accelerator for the adoption of CA. But is that actually the case in practice? Which financial data

is covered by XBRL? Is that only data for the purpose of the financial report (in the end of the

process)? Or is XBRL actually used in the CA processes, through CM and control processes? Or

are these processes not taken into consideration by XBRL software makers in times were risk

and control are so important?

K.B. Khargi 275859 18 May 2011 6


1.3 Research Objective

For this study the focus is on CA and XBRL adoption in The Netherlands. The objective of the

research is to deliver a description on how XBRL is applied in CA processes in practice, in which

business process this is best applied and which processes less.

This research contributes to the scientific field of CA and XBRL in The Netherlands.

1.3.1 Scientific Relevance

As is shown in the figure of the hype cycle for GRC technologies on the next page, controls

automation and monitoring was still in the technology trigger phase in 2008. For this thesis, the

assumption is made that controls automation and monitoring includes continuous auditing. The

fact that it was in the technology trigger phase in 2008 means that a breakthrough, public

demonstration, product launch or other event catches the attention of significant press and

industry. Due to the lack of more recent (free) information about the phase controls automation

and monitoring is now in, the assumption is made that it is still in the same phase.

K.B. Khargi 275859 18 May 2011 7

Process 1

Process 2

Process 3

Process 4

Process …

General

Ledger:

Several

Journal

Entries

Continuous Auditing

Annual account,

Management

Reports,

Etc.

XBRL (external use)XBRL (internal use)


Figure 1: Hype Cycle for GRC Technologies

Source : Gartner 2008

For financial reporting with XBRL it was found that it is also in the technology trigger phase for

2009 an it is on the rise. As for XBRL as it is, in 2005 it was placed on Gartner’s hype cycle for

emerging technologies in the middle of the phase Through of Disillusionment.

1.3.2 Business Relevance

The result of this study is a description of what measures need to be taken before financial

information tagged with XBRL is utilized in risk and control systems. The research can be

beneficial for businesses, because it illustrates how CA could use XBRL. And although it is not

the purpose of this research, it can show where improvements are possible.

There are already different parties involved in the expansion of XBRL in The Netherlands. But

the majority of these parties are governmental institutions.

K.B. Khargi 275859 18 May 2011 8


1.4 Research Question

For this research the assumption was made that for the use of XBRL in continuous monitoring/

auditing processes is the same as using XBRL within internal business processes, i.e. the front of

the business reporting supply chain (section 4.1).

During the gathering of empirical data in the form of interviews with experts it became clear

that XBRL in The Netherlands is not used for internal processes.

The research question then changed into:

Sub questions to answer the research question are:

What is XBRL?

What is continuous auditing?

Why is XBRL an accelerator for continuous auditing according literature?

Why is XBRL not yet used for internal process in The Netherlands?

What are the conditions to implement XBRL for internal processes and continuous

monitoring/ auditing?

K.B. Khargi 275859 18 May 2011 9

What is required in order to shift XBRL towards the front of the business reporting

supply chain for the purpose of continuous auditing in The Netherlands?


1.5 Research Methodology

In order to gain the answers to the research question and the sub questions a literature study as

well as empirical data were needed.

The literature study was conducted in order to gain knowledge on the background of the topic

and support the motivation for the research. Furthermore, literature study served as a tool to

find answers to some of the sub questions.

In order to gather empirical data for this research interviews, because the topic is relatively

new. Although both CA and XBRL have been developed for over a decade now, we see in

publications of previous research (Khargi 2010) that implementation in the Netherlands goes

with struggle (SBR). Therefore qualitative research is required for this study. Interviews were

held in order to match the results of the literature study with the practice.

Figure 1: Scheme of Methodology and Thesis Construction

K.B. Khargi 275859 18 May 2011 10

Theory Practice

Literature Study

for motivationmeans for matching practicechapter 2,3,4,5

Empirical data: Interviews

chapter 6

Analysis

chapter 7

Conclusion

chapter 8


1.6 Thesis Construction

In chapter 2 of this thesis the background of XBRL is presented. A short explanation of what

XBRL from technical and accounting point of view is given. Something about the history and

development is mentioned. And a brief overview of the adoption in various countries is set out.

Chapter 3 is about continuous auditing and its background. There are several descriptions

found in literature. Some of them are presented. The development of continuous auditing

through time is given.

In chapter 4 an overview is presented of XBRL in the operating and continuous auditing

processes. This is done by first explaining the concept of the business reporting supply chain

and the place of XBRL and CA in this supply chain. In literature many times is stated that XBRL

will enable CA.

Chapter 5 is about the SBR, Standard Business Reporting initiative developed in The

Netherlands.

In chapter 6 the elaboration of the interviews held is presented. These are structured in a top-

down approach. The top level interviews have been held with the chairman, vice chairman, and

ex-chairman of XBRL Netherlands. Three IT auditors have been interviewed, for the middle level

point of view. Because of the lack of implementation of XBRL for internal purposes, a summary

of two case studies was used for the bottom level.

In chapter 7 the analysis is presented and the sub questions and research question are

answered by means of the empirical data and the information found in literature,

Chapter 8 contains the conclusion of this thesis, with the main findings and the lessons learned

and recommendations for future research.

K.B. Khargi 275859 18 May 2011 11


2. XBRL

In this chapter the background of XBRL is presented. In order to explain XBRL different

approaches are presented. The accountants’ point of view is set out and on the other hand there

is an approach from a technical point of view.

2.1 The purpose of XBRL

XBRL is a language for the electronic communication of business and financial data which is

revolutionising business reporting around the world. It provides major benefits in the

preparation, analysis and communication of business information. It offers cost savings, greater

efficiency and improved accuracy and reliability to all those involved in supplying or using

financial data.

XBRL stands for eXtensible Business Reporting Language. It is based on XML and is therefore a

markup language that codes financial information into a machine readable format compatible

with most technological formats (Rezaee & Turner 2002). XBRL is a text-based language like

HTML, and any text editor can be used to create code or “tags”. This XML-derivative language is

aimed at enhancing and facilitating the business reporting and analysis process at accounting

level (Bovee et al. 2005).

K.B. Khargi 275859 18 May 2011 12

Process 1

Process 2

Process 3

Process 4

Process …

General

Ledger:

Several

Journal

Entries

Continuous Auditing

Annual account,

Management

Reports,

Etc.



Figure 3: Change in business reporting

Source http://linkupima.com/groups/7eab42efae/summary

2.2 Two tiered design of XBRL

In order to accommodate significantly diverging financial reporting practices among different

countries and various industries, XBRL uses a two-tiered design consisting of the XBRL

specification and XBRL taxonomies (Bovee et al. 2005). The XBRL specification provides a set of

generic tags for expressing various facts, and as such, this is not tied to any particular set of

accounting standards or practices, or even to accounting in general. To provide concrete tags for

marking an actual financial report, the XBRL specification has to be complemented with an

XBRL taxonomy. It is an XBRL taxonomy that defines the markup of various accounting concepts

as well as the hierarchical and numerical relationships among these concepts. While one single

XBRL specification suffices, numerous taxonomies must be developed to accommodate the

needs of different countries or industries.

Figure 4: XBRL chain of dependence

Source http://linkupima.com/groups/7eab42efae/summary

K.B. Khargi 275859 18 May 2011 13

http://linkupima.com/groups/7eab42efae/summary



2.3 Technical definition of XBRL

According to a recent survey by the Institute for Internal Auditors (IIA), 51% of internal

auditors confess that they lack a good understanding of XBRL technology (Bizarro & Garcia

2010). For those and others who are interested a technical definition is presented beneath.

At first, the start of the financial reporting process is at the transaction level data. XBRL can be

used to store these data system-independently. This can be used to automate the aggregation

process, as consolidation or summarizing to the financial statements. XBRL can do this

automatically for multiple reporting formats (US GAAP or IFRS).

The data structure is defined by the XBRL Specification 2.1 and is composed of a series of

taxonomies that define financial reporting concepts and their relationships. An XBRL taxonomy

is equivalent to a stack of XML schema files, which define the structure, content and semantics

of XML instance documents. A taxonomy can be compared to a dictionary which includes the

data elements and their meaning. An XBRL schema is usually a long list of items (more formal:

a list of elements where each element belongs to the substitutionGroup `xbrli:item'). The

accounting concepts are arranged in a hierarchical structure using a parent-child relationship.

An instance (=xbrl data file) consists usually of some units (currencies), some contexts (periods

of instants), and a long list of items (with a unit and a context as attributes) (Pijls 2010).

Figure 5: process XBRL FR

Source: Bizarro & Garcia 2010

K.B. Khargi 275859 18 May 2011 14


The picture shown on the previous page illustrates the typical process of using XBRL FR (for

Financial Reporting) to generate and distribute financial information. This can be explained in

several steps:

The first step for a company is mapping the financial statements to the standard

taxonomy following the company’s chosen reporting framework (e.g., GAAP).

Next, a taxonomy entity-specific extension is created to address the company’s own

accounting concepts and adjusted taxonomy relationships.

This collection of taxonomies is called a discoverable taxonomy set (DTS).

An XBRL instance document is created based on the financial data stored in the

reporting system.

The DTS is used to validate the instance document whether XML is well-formed and

whether the data is consistent with the XBRL Specification.

Finally, instance documents can be imported to an application for analysis or audit, or

combined with XSL style sheets and transformations documents according to the user’s

specification can be formed.

2.4 Barriers for adopting XBRL

Although the development of XBRL shows great promise, there are barriers to wide acceptance

of XBRL. These include the high cost associated with adopting XBRL and (in 2005) the lack of

requirement to file financial statements in XBRL. Though, the SEC has mandated that all U.S.

publicly traded companies file their financial statements using XBRL by the year 2011 (Bizarro

& Garcia, 2010). And, large accelerated filers using U.S. GAAP were required to begin reporting

in XBRL in 2009.

Another major barrier to widespread XBRL adoption is the difficulty of agreeing on common

taxonomy standards (Bovee et al., 2005). A condition for widespread acceptance of XBRL as a

standard is that intelligent software tools must be developed and utilized to automatically

process the semi-structured natural-text financial documents that are publicly available.

Developing XBRL taxonomies is a difficult, labour intensive and controversial process. A typical

taxonomy has to define markup for several hundred concepts, and it has to be done in

accordance with generally accepted accounting standards and practices. The standards are

usually not formal enough and the practices are not uniform enough to allow an unambiguous

translation of them into taxonomies (Bovee et al, 2005). On one hand, it is important to develop

K.B. Khargi 275859 18 May 2011 15


a sufficient number of taxonomies to accommodate the true needs of all constituents. On the

other hand, it is important to avoid the proliferation of different taxonomies to the extent

possible, since the use of different taxonomies impedes the comparability of financial reports. It

is therefore important to develop a methodology for evaluating proposed XBRL taxonomies,

developing ways of improving them, and identifying and justifying needs for additional

taxonomies.

Another challenge with XBRL is that it requires enhanced general and application controls

(Bizarro & Garcia 2010). General controls include application development, maintenance and

access. Application controls include input, error correction and output. XBRL also requires

enhanced network security, because substantial security risks exist if the security of the

operating system, application, and database is inadequately configured. Such configuration

errors could allow unauthorized changes or even the destruction of transactional data

supporting the financial statements.

Strader (2007) mentions some organizational implications of XBRL:

How should the ROI be determined?

What is the proper conversion process, given that a financial reporting system must be

available at all times?

How to train employees affected by the conversion to XBRL?

One solution to the third implication could be outsourcing either or both the implementation

and the financial reporting system. Outsourcing creates a tremendous opportunity for

consulting companies, and universities need to start trainings regarding XBRL.

K.B. Khargi 275859 18 May 2011 16


2.5 Benefits of XBRL

Articles on XBRL often list and describe the benefits of XBRL for the financial reporting of

aggregated or summarized financial information only. But, XBRL also has benefits for auditors,

both internal and external (Bizarro & Garcia 2010). These include:

Improving data analysis; XBRL can free resources from low-value-added manual

processes to higher- value-added aspects of analysis, review, reporting, and decision

making.

Better risk assessment; regardless of the kind of risk assessment to be performed, XBRL

can make the process faster, more accurate, more comprehensive, and more current.

Accelerated implementation of continuous auditing; XBRL can assist in the control of

data being passed from one process to the next, and might soon form the basis for a kind

of process assurance.

Improved internal controls; because XBRL is machine readable it eliminates

mathematical errors, and because of transferring data from machine to machine it

eliminates manual intervention (rekeying of data or manipulation via a spreadsheet).

Reducing spreadsheet proliferation; XBRL data downloaded to a spreadsheet retain

information regarding their content and origin, helping to maintain an audit trail,. XBRL

can even eliminate spreadsheets: manual intervention is not necessary, because XBRL-

tagged data can flow directly between applications.

Enhanced audit trails; the automated capture and reporting of audit trail data improve

accuracy and enhance the timeliness of audit systems. Also, automated audit trail

systems provide significant enhancements to monitoring and notification systems.

Chironna & Zwikker (2010) mention the benefits of 100% testing in the form of reduced

detection risk, reduced audit risk, and more accurate assertions about general ledger accounts

and factual conclusions about the effectiveness of internal controls over financial reporting.

Also, performing a CAAT (Computer Assisted Audit Tool) audit procedure leads to a consistent

quality of working paper documentation, because automated procedures eliminate the

difference in work of different auditors. But these benefits are not XBRL related, they already

exist with the use of ASCII of XML files. A benefit which XBRL offers is the standardization of tag

definitions by industry.

Garbellotto (2009) also mentions 100% testing, and creating the conditions for continuous

auditing/ monitoring, and reducing risk by eliminating manual intervention. But he also

K.B. Khargi 275859 18 May 2011 17


mentions one opportunity for internal auditors: XBRL offers a reliable standardized and quickly

deployable model. An example of a situation in which it is critical to extend the corporate

internal controls and procedures to a new information system as rapidly and effectively as

possible, is in the case of a merger or acquisition.

Expected benefits of XBRL named by IASC (International Accounting Standard Committee

Foundation) (2008)

• More financial information available to investors

• Less costly and more timely production of financial information

• Increased accuracy

• Increased comparability and improved interpretation of financial data

2.6 Adoption of XBRL in different countries

In the section a brief overview is presented of the status XBRL adoption for external reporting in

several countries over the world. For the Netherlands an overview is given of the Standard

Business Reporting (SBR) Program for external reporting.

2.6.1 XBRL adoption around the world

The factors for driving the adoption of XBRL by regulators worldwide are the process

efficiencies, information transparency, and significant cost savings (Garbellotto 2009).

Today XBRL has been adopted in countries worldwide. In some countries the adoption of XBRL

has made great progress and they have required reporting in XBRL by law. Some countries are

lagging behind and have reporting in XBRL enabled instead of required. The table below gives

an overview of XBRL implementations for external reporting for several countries.

K.B. Khargi 275859 18 May 2011 18


Figure 6: Some XBRL projects in the world

Source: Garbellotto 2009

In almost any country of Western Europe, reporting in XBRL is enabled. Other countries that

have made great progress in the development with XBRL are Belgium and Spain. In Belgium

there is the `Balanscentrale’ (Chamber of Commerce) and reporting in XBRL is required (Pijls

2010). XBRL Spain has been key in the work done by European banking regulators to create

XBRL taxonomies to support Basel II requirements (Garbellotto 2009).

K.B. Khargi 275859 18 May 2011 19


Figure 7:XBRL driving forces IASB (2008)

Source: http://www.slideshare.net/pmadziar/fee-xbrl-webcast.piotr-february-17-2009

The chart above displays driving forces for XBRL in the European Union. There are several

factors that have impact on the development and adoption of XBRL. These factors are:

The various member states (MS) of the European Union.

The European Council and Parliament.

The member states of the G20 and the conferences about the current financial crisis.

Commision Stoiberg that was founded in July 2008 in order to promote e-government

and identify best practices in IT use.

Commission De Larosie that was founded after the financial crisis in order to accelerate

reform of supervision, converge supervisory practices, and manage cross-sectional risks.

2.6.2 XBRL in The Netherlands

In The Netherlands the Dutch Taxonomy has been developed as a part of the Standard Business

Reporting programme. Entrepreneurs and intermediaries are able to assemble a part of their

financial reports by means of this taxonomy. Hitherto, the Dutch Taxonomy is connected with

three domains: Belastingdienst (Tax Services), Kamer van Koophandel (Chamber of Commerce)

for annual accounts and Centraal Bureau voor Statistiek (Central Bureau for Statistics) (Pijls

2010). During the development of this taxonomy these three institutions have inventoried

which financial data elements they use, and what the connection between those data is. The

Dutch Taxonomy contains about 8,000 elements, which can be dived in certain domains:

General data, such as names and addresses

K.B. Khargi 275859 18 May 2011 20

http://www.slideshare.net/pmadziar/fee-xbrl-webcast.piotr-february-17-2009


Commercial data, like IFRS

Fiscal data

Statistical data

http://www.belastingdienst.nl/zakelijk/softwareontwikkeling/softwareontwikkeling-10.html

In chapter 5 of this thesis SBR is elaborated.

2.7 XBRL Tooling

Tooling for XBRL can be divided in different categories: tools for creating instance documents,

creating taxonomies, explore taxonomies, review XBRL documents, validate XBRL documents,

and view XBRL. Big players on the XBRL software market are Semansys Technologies and

Fujitsu.

K.B. Khargi 275859 18 May 2011 21



3 Continuous Auditing

In this chapter the term continuous auditing is explained. Also, some background information of

the history is presented.

3.1 What is Continuous Auditing?

In real-time accounting systems it has become desirable to have continuous assurances as to the

condition of the information’s integrity (Flowerday and von Solms, 2005). Furthermore,

continuous assurances allow for corrective action to be taken sooner when a problem is found

rather than in current auditing scenarios. To quote, ‘‘The focus of the audit will shift from manual detection to technology-based prevention’’ (Bierstaker et al., 2001).

Rezaee(2002) defines continuous auditing as “a comprehensive electronic audit process that

enables auditors to provide some degree of assurance on continuous information

simultaneously with, or shortly after, the disclosure of the information”. He speaks of

continuous auditing as a process.

The definition of continuous auditing used by the AICPA and CICA: “a methodology that enables

independent auditors to provide written assurance on a subject matter using a series of

K.B. Khargi 275859 18 May 2011 22

Process 1

Process 2

Process 3

Process 4

Process …

General

Ledger:

Several

Journal

Entries

Continuous Auditing

Annual account,

Management

Reports,

Etc.



auditors’ reports issued simultaneously with or a short period of time after, the occurrence of

events underlying subject matter.”

In the Global Technology Audit Guide (GTAG) Coderre (2005) says CA is an umbrella for two

main activities: continuous control assessment and continuous risk assessment. With control

assessment audit’s attention is focused on possible control deficiencies. With continuous risk

assessment processes or systems that are experiencing higher than expected levels of risks are

highlighted.

Continuous auditing = continuous control assessment + continuous risk assessment

Coderre mentions that the frequency of the continuous activity will depend on the risk inherent

to the process or system.

Continuous audit procedures can be designed to test internal controls, by analogy with

traditional auditing. This is called continuous control monitoring. CA procedures can also be

designed to execute substantive testing, including analytical procedures. This is then called

continuous data assurance. (Alles et al. 2008)

Continuous auditing = continuous control monitoring + continuous data assurance

K.B. Khargi 275859 18 May 2011 23


Figure 8: Continuous monitoring/ auditing/ assurance

Source: Sheets KPMG 2008

3.2 History of Continuous Auditing

Traditionally, accounting was done throughout a basic period of time. The financial reports

could only be produced based on information which was too costly to obtain on a real-time

basis. Hence, reports have been issued months after the occurrence of the actual events these

represent. In this setting, auditing is mostly a backward-looking exercise testing the accuracy of

the reported numbers (Rezaee, 2002).

Figure 9: Traditional Auditing vs. Continuous Auditing

Nowadays, because of developments in technology, organizations are able to produce

standardized financial information on a real-time, online basis. But, there is also a demand from

stakeholders for transparency. And also, the alignment with regulatory compliance for financial

reports has had great influence on the evolvements in accounting. Continuous auditing enables

auditors to be transparent and to significantly reduce and perhaps eliminate the time between

occurrence of the client’s events and the auditor’s assurance service (Rezaee, 2002).

The origins of automated control testing started with the implementation of embedded audit

modules (EAM) in the 1960s. By the late 1970s this development was fading away and auditors

begun moving away from this approach. Early adopters among auditors began using computer

assisted audit tools and techniques (CAATTs) in the 1980s. This was used for ad hoc

investigations and analyses. In that same period, continuous monitoring was being introduced

to auditors in a largely academic context. But, auditors were not yet ready; they lacked easy

access to appropriate software tools, technical resources and organizational commitment

(Coderre, GTAG 2005).

During the 1990s, the adoption of data analysis solutions within the global audit profession

increased. These solutions were seen as critical tools to support the testing of the effectiveness

of internal controls. Data analysis supported the testing of controls not directly evidenced by

K.B. Khargi 275859 18 May 2011 24


transactional data. And, in spite of the technology, analyses took place sometime after the

completion of the business activity and only for representative samples. (Coderre, GTAG 2005)

Today, rapid growth of information systems in the business environment gives auditors easier

access to more relevant information. This is needed, because today’s internal auditors do not

just audit control activities. They also play a role in enterprise risk management and how to

improve this. If they don’t have a thorough understanding of the business processes and

associated risks, auditors can only perform traditional audit checklist tasks.

3.3 Benefits and issues of continuous auditing

Using continuous auditing has benefits for a company (Moore et al. 2004):

The audit cycle is shorter, because of more timely reporting.

There is potential cost reduction, because of the reducing manual effort.

The audit effectiveness will increase, because of the capability to analyze a greater

number of transactions in a timely manner.

There are some issues involved with the use of continuous auditing (Moore et al. 2004):

There will be a greater need of IT and statistically trained staff.

Trainings must be taken in order to increase understanding the meaningfulness of

immediate audit information.

Technical issues, such as security and integrity of data will arise.

3.4 Continuous auditing in The Netherlands

In a previous study of continuous auditing/ monitoring in The Netherlands experts have been

interviewed and these were the findings (Khargi 2010):

The main reason for companies for implementing CA/CM is staying in control.

Before implementing CA/CM the company must be in the managed or optimized phase

of the maturity model.

It is not feasible to have 100% automation. Some controls need to be checked manually.

Real time monitoring or auditing is not feasible within an ERP system. This will have an

impact on the performance level.

No prescribed audit procedures or internal audits are required for implementing

CA/CM. But in practice companies listed on the stock market are ahead in the

K.B. Khargi 275859 18 May 2011 25


implementation of CA/CM. Those companies have an IA department and have to comply

with regulations as SOX or Tabaksblat.

Management support and peoples’ willingness and their awareness to cooperate are of

importance for succeeding a CA/CM project.

Financial institutions are ahead in implementing CA/CM because of their experience of

risk mitigation for decades, and because of compliance with regulations. Production

companies are also far, because of their business processes with relative ease of risk

analysis and risk mitigation.

For the future of CA/CM it depends on the economical situation and the level of maturity

of the companies whether and how fast there will be an increase in the implementation

of CA/CM.

3.5 Requirements for Continuous Auditing

According to Murthy & Groomer (2003) there are some criteria and requirements for

continuous auditing. In order to conduct a continuous audit a number of conditions must be

present. These conditions are that:

• The client must have highly reliable systems. These systems must be able to provide

the necessary subject matter to the auditor on a timely basis.

• The subject of the audit has suitable characteristics necessary to conduct the audit. For

example, if the audit is focused on evaluating internal controls, then the auditor

must be able to electronically interrogate these controls.

• The auditor must have a high degree of proficiency in information systems, computer

technology, and the audited subject matter.

• Automated audit procedures will provide most of the audit evidence necessary to

opine on the subject of the audit.

• The auditor must have a reliable means of obtaining the necessary audit evidence so

that an opinion can reached.

• The auditor must have timely access to and control over any audit evidence generated

as a result of the continuous auditing procedures.

• It is necessary to have a “highly placed executive” in the client organization who will

serve as a champion for the adoption and support of continuous auditing.

K.B. Khargi 275859 18 May 2011 26


Continuous auditing requires integrity and security in transferring data from the client’s system

to the auditor’s database, and it also requires security of the auditor’s database (Moore et al.

2004)

3.6 Tools for Continuous Auditing

CA/CM needs to include all ERP and other financial and information management systems the

company operates, so the related transaction and configurable data can be analyzed and

monitored with CA/CM tools. These tools should help detect data integrity issues, provide

scalability, identify performance cost savings and enhance cycle time for detection, correction,

and improvement (KPMG Whitepaper, 2008).

Tools that focus on access rights and conflicts in segregation of duties are: SAP GCR Acces

Controls, Approva Bizrights, Security Weaver, CSI Authorization Auditor and SecurInfo.

There are tools on the market that have features for process controls like: document internal

control measures, clarify and define control measures that cover all risks, facilitate the testing

the controls’ effectiveness. These tools are the solution of Bwise, that ARIS audit manager, and

SAP GRC Process Controls.

Other tools for GRC are: ACL Services, D2C Solutions, LogicalApps, Oracle, and Oversight

Systems. (Ibrahim 2008)

K.B. Khargi 275859 18 May 2011 27


4 XBRL and CA in the Business Reporting Supply Chain

In this chapter an overview is presented of XBRL in the operating and continuous auditing

processes. This is done by first explaining the concept of the business reporting supply chain

and the place of XBRL and CA in this supply chain. In literature many times is stated that XBRL

will enable CA. In section 4.2 the reasons why XBRL enables CA according to several authors are

presented.

4.1 Business Reporting Supply Chain

Auditors are interested in receiving more guidance on how to use XBRL throughout the

different phases of the financial/ business reporting supply chain (BRSC) (Bizarro & Garcia

2010). The picture on the next page gives an overview of the use of XBRL in different processes.

In the Business Operations block, transactions, entries, and documents are first initiated,

authorized, and recorded into an information system. This is the trigger for the various steps

within the BRSC where the transactions are processed and other related events are triggered.

These include events such as orders becoming invoices, or invoices getting paid. Eventually,

these transactions are summarized and rolled up to multiple internal and external reports.

(Garbellotto 2009)

K.B. Khargi 275859 18 May 2011 28

Process 1

Process 2

Process 3

Process 4

Process …

General

Ledger:

Several

Journal

Entries

Continuous Auditing

Annual account,

Management

Reports,

Etc.



Figure 10: Business reporting Supply Chain and XBRL

For external users who primarily require summary financial information, the focus is on XBRL

FR (for Financial Reporting), which can express only a limited amount of detail, such as the unit

of currency, reporting unit, etc. For internal and external users who require highly specific data,

the emphasis is XBRL GL, which can express both financial and nonfinancial information at the

detail level at all stages of the information supply chain. (Hitachi)

There is no standard “XML grammar” for defining and structuring business process messages. In

2003 one of the alternatives aimed at filling this void was XBRL-GL (Global Ledger). This

specification is aimed at internal accounting systems at the transaction level. Referred to as the

“Journal taxonomy”, the XBRL-GL specification can be used for representing both financial and

non-financial information. It is both extensible, given its roots in XML, and standards-based,

enabling cross-platform information exchange around the world (Murthy & Groomer 2003).

The GL in XBRL GL originally stood for General Ledger, and you'll still sometimes see that

terminology. But the current, more expansive term of Global Ledger is much more suitable,

because XBRL GL isn't simply a place to collect journal entries. It is a single framework for

standardizing all information of business reporting systems for both internal and external users.

XBRL GL can bring together data from disparate operational, reporting, and accounting systems

K.B. Khargi 275859 18 May 2011 29


and consolidate it through Web Services, high bandwidth networks, and petabyte storage

systems. It is therefore ideal for system integration, consolidation, data migration, and data

archiving. (Hitachi)

XBRL-FR (financial reporting) is the more visible and better known use of XBRL. It is the

manner to represent regulatory filings and other types of summarized external reports to which

the underlying detailed data rolls up. There are a range of financial reporting taxonomies

currently available. The most well known are those for US GAAP and IFRS (Garbellotto 2009).

4.2 XBRL-GL: an enabler for CA?

In many papers about continuous auditing XBRL is mentioned as an enabler that will accelerate

the adoption of CA. In this section a review of this literature is presented and the question why

XBRL is seen as an enabler according to these authors is answered.

In their paper Murthy & Groomer (2003) say that future accounting systems are likely to be

built using XML technologies, incorporating both a closed (proprietary) set of XML tags for

internal reporting purposes and open XBRL tags for external reporting. The XBRL-GL taxonomy

offers a mechanism for XML-based corporate accounting systems to interface with one another,

regardless of differences in the XML tag set employed within each system. Murthy & Groomer

say that while the emerging landscape of XML-driven accounting systems poses significant

challenges for accountants and auditors, it also provides opportunities to reengineer how a

continuous auditing mechanism operate.

It is now 2011 and over the years people have been writing the same:

XBRL and XML enable use of continuous auditing, because they facilitate real-time transfer of

client data to auditor database. These languages also add flexibility to the use of embedded

audit module and generalized audit software (e.g. IDEA and ACL) (Moore et al. 2004)

XBRL enables continuous auditing by placing financial data in a format which is not proprietary

to any specific software application, allowing any future continuous auditing system access to

data on any software platform, running any software (which uses XBRL), in any country.

(Flowerday2006)

K.B. Khargi 275859 18 May 2011 30


It has become increasingly obvious that continuous audit is now not only technically viable, but

is the auditor’s preferred response to the challenges posed by continuously changing business

conditions, massive data volumes, and the demand to audit better, smarter and faster. Thus, CA

requires the auditor to have ongoing and ready access to enterprise data. XBRL-GL enables

auditors to pull information from disparate systems and map this information to standardized,

tagged format, both in terms of the data content, and the most important, placing and

maintaining the data in the correct business context throughout the audit and reporting process

(Matthews 2008).

Oringel & Aldhizer (2009) say XBRL can enhance CA/CM: XBRL applied at the transaction level

can substantially reduce the cost of accurate, entity-wide acquisition. In a non-XBRL- enabled

environment, the acquisition of accurate entity-wide data may be the most challenging and

costly step in implementing continuous auditing. Fully integrated XBRL allows transaction level

data to be uniquely defined and tagged so that it can be read and analyzed by any operating

system in real time. This standardized representation facilitates more efficient and reliable data

acquisition used in entity wide business risk, mitigating control, operational efficiency,

compliance, and reporting assessments on a quarterly, monthly, or near real-time basis.

Unfortunately, XBRL in the US is only mandatory for public companies and involves end-user

reporting requirements instead of fully integrated XBRL at transaction level (Garbellotto, 2009).

4.3 What features XBRL to be an enabling factor for CA?

In their paper XBRL: Benefits for FR and Auditing Bizarro & Garcia mention benefits of XBRL for

auditors. These are the benefits they mentioned in the paper (presented in chapter 2):

Improving data analysis

Better risk assessment

Accelerated implementation of continuous auditing

Improved internal controls

Reducing spreadsheet proliferation

Enhanced audit trails

Except for ‘reducing spreadsheet proliferation’ all other benefits from this list involve

continuous auditing.

K.B. Khargi 275859 18 May 2011 31


Since it encompasses both financial and nonfinancial information, XBRL GL can be used for

employee timesheets, purchase order processing, invoicing, and all other elements of the

manufacturing workflow. It can easily transfer unposted and posted information back and forth

from branch offices to consolidating systems. Externally, XBRL GL enables companies to share

data on receivables with their bankers, and inventory levels with their suppliers. (Hitachi)

XBRL-GL can bridge the gap between extensive manual audit and reconciliation procedures, and

make the roll-up of continuously audited data into XBRL-enabled financial statements a faster,

more effective process. The result is less opportunity for errors, less re-work, and improved

efficiency for all stakeholders in the financial reporting process. If a standard XBRL-GL schema

is adopted and implemented widely by both technology providers and organizations submitting

financial reports, one could reasonably expect the efficiency and cost savings of continuous

audit to be achievable for more companies. At the very least, it would allow more organizations

to benefit from continuously reviewing key financial controls and help overcome the data access

challenges that often prevent companies from even trying (Matthews 2008).

K.B. Khargi 275859 18 May 2011 32


5 Standard Business Reporting in The Netherlands

This chapter gives a description of the Standard Business Reporting initiative developed in The

Netherlands. The SBR program was developed by the Dutch Taxonomy Project (NTP) and

captures nearly every XBRL project in The Netherlands.

5.1 What is SBR?

The Standard Business Reporting (SBR) initiatives are cross-government, multi-agency projects

aimed at reducing the administrative cost of compliance for businesses. The SBR model was

developed in The Netherlands by the Dutch Taxonomy Project (NTP) in 2004. This model was

adopted by Australia in 2006. And in May 2008 the New Zealand government announced the

decision to establish and SBR programme (Garbellotto 2009)

SBR is an initiative for designing the business report supply chain, and uses international open

standards for data, processes and technique, on which the components are based. These SBR

components are applied by the government and all parties to facilities in order to create and file

reports.

K.B. Khargi 275859 18 May 2011 33

Process 1

Process 2

Process 3

Process 4

Process …

General

Ledger:

Several

Journal

Entries

Continuous Auditing

Annual account,

Management

Reports,

Etc.



Figure 11: Scheme of the SBR program

Source: SBR

5.1.1 The SBR standards

The standards used for SBR are managed by international communities. Users of these

standards can form taskforces and place their input on improvements for the SBR programme.

The standards used in the SBR programme are:

XBRL for structuring data software independently and unambiguously.

SOAP (Simple Object Access Protocol) for sending XML messages.

BPMN (Business Process Modelling Notation) for modelling the report processes in the

business reporting supply chain. BPMN is the base for BPEL.

BPEL (Business Process Execution Language) for specifying the interaction between the

web services for executing the step in the business reporting supply chain.

K.B. Khargi 275859 18 May 2011 34


5.1.2 The SBR components

The components used for SBR can be applied for multiple report objectives, and are used for

different kinds of reports: annual accounts, tax filings, statistic reports, and credit reports. The

components are available for everyone, and are maintained by the SBR team Logius in

association with other parties. The components are:

Architecture Dutch Taxonomy; with this architecture is specified which parts of the

XBRL standard are applied in which way for the situation in The Netherlands. The

architecture also arranges the connection between the Dutch Taxonomy and the

extensions for the specific reports.

Dutch Taxonomy can be compared to a dictionary, a glossary with terms and definitions

and their dependencies towards the different reports. Every year a new version is

placed at disposal.

Supplementary specifications; there are two forms: NL-FRIS (Financial Reporting

Instance Standards) with requirements for the Dutch taxonomy, and for designing the

authorization services specifications for signing messages.

Interface specifications describe the technical specifications for the connection and the

use of “Digipoort”, the digital portal.

Process descriptions; the report demanding parties have prescribed report processes.

These are necessary for a complete, adequate and timely processing and finishing of the

sending messages. These descriptions are also the base for error handling, service level

agreements and other agreements involving quality and completeness.

5.1.3 The SBR facilities

The first block of facilities in SBR is obvious; it includes the implementation of SBR in

software and services. It encompasses the mapping of the taxonomy with the data

model, making functions available for creating XBRL instances (as the chart of section

2.3 of this thesis), and signing and sending messages. Also, the invocation of services like

authorization of the messages and processing reply messages are facilitated. With these

implementations software and services are being enabled for creating, sending and

processing XBRL report by means of “Digipoort”.

“Digipoort” bij Logius is a central portal for exchanging SBR reports between business

and government. IT has implemented the interface specifications and process

descriptions. “Digipoort” receives the reports, validates them and delivers them to the

receiving organization. When this is done successfully, a reply message is sent.

K.B. Khargi 275859 18 May 2011 35


5.1.4 Filing reports with SBR

When they are SBR enabled by software and services suppliers, companies or their

intermediaries can create an SBR report and file this. These are the steps:

Creating a report; by simply pushing a button (or clicking the mouse) in the

administrative software, or by referring to an external service provider which converts

‘ordinary’ reports to XBRL reports.

Signing the report; this can be done by a built-in functionality, or a separate

authorization service invoked by the software.

Connecting; a connection is made with “Digipoort”.

Filing the report; from the reporting facility (software of service) the actual SBR report

is filed by sending it to “ Digipoort”.

Finishing the process; the process handling is completely done within “Digipoort”. Error

messages are automatically sent to the filer. If the problem occurs again the filer has to

contact Logius, which will take a look at the problem (together with the receiver) and

try helping solve it.

Delivering the message; this is also an automated process within “Digipoort”.

K.B. Khargi 275859 18 May 2011 36


5.2 Benefits of SBR to business

The benefits expected from the SBR initiatives are significant. The NTP estimates 25% reduction

in the administrative costs for businesses from the SBR project. There has already been

achieved an impressive reduction in the number of data elements that organizations have to

report to various government agencies (from 200,000 to 4,500). In Australia, the benefits for the

businesses are estimated at AU $ 795 million per year on an ongoing basis, once SBR is fully

established (Garbellotto 2009).

Because SBR includes XBRL, the some benefits of XBRL also imply for SBR. Although, most of the

benefits of XBRL mentioned in chapter 2 seem to cover the operational/ business part of the

financial reporting supply chain. The benefits that overlap are:

Reduction of spreadsheet proliferation, reporting and administrative work;

Improvement in quality of reports: less errors and faster error detection;

Used internationally.

Additional benefits of SBR involve those of the other techniques; SOAP, BPMN and BPEL and

regard the delivery of the reports. These are:

Efficiency benefits: one input, several deliveries;

Certainty about receiving and processing the reports;

(SBR-nl)

K.B. Khargi 275859 18 May 2011 37


6 Empirical data

In order to fully answer the research question, interviews had been held. For these interviews a

top-down approach is used. The top level interviews have been held with the chairman, vice

chairman, and ex-chairman of XBRL Netherlands, in order to capture their view on XBRL and

continuous auditing. Furthermore, three IT auditors have been interviewed, for the middle level

point of view. Because of the lack of implementation of XBRL for internal purposes, a summary

of three case studies(Semansys; xbrl.org) is found in this chapter, for the bottom level.

6.1 Top level interviews: chairpersons XBRL Netherlands

In this section the interviews with the top level of XBRL people are elaborated. Three different

interviews were held.

6.1.1 Interviewee1

Background interviewee1

Interviewee1 works part time at several universities in the domain of accounting, audit and

control. He was chair person of XBRL Netherlands and has been in the board of the NIVRA for

ten years. He was initiator of the Dutch taxonomy project. Since January 2011 he is involved

with the SBR in knowledge expansion and XBRL & assurance.

XBRL

K.B. Khargi 275859 18 May 2011 38

XBRL Netherlands

IT auditors

Case Studies


Of the companies where XBRL is implemented about 98% are SME (small and medium

enterprises).

XBRL expansion is still in the first stage where a bolt-on approach is used. This means that

implementation is applied only at the rear end of the reporting supply chain. Most often this is

an aggregated process, where existing data is converted into XBRL.

Using XBRL internally is not an issue, and is seen as problematic and costly.

An embedded approach is starting to rise, although this is still aggregated, and it is not at the

beginning of the chain, still, more towards the start.

In the US outsourcing is most common. This is the most simple solution.

When the frequency of XBRL projects will increase the shift towards the front of the chain will

occur.

There are only two examples where XBRL is implemented at transaction level. This is done at

Wacoal in Japan and Fujitsu is also involved with XBRL-GL.

In The Netherlands there is one project at the tax services, regarding internal revenue, still in

the early phase.

Bigger companies stick to the systems they already use. Shifting the focus to the front end of the

chain with GL once, only works when there are efficiency benefits. Implementing XBRL GL

causes adjustments in business processes. And companies will then wait for a natural moment

to do so.

Reasons for XBRL

For about 98 % of the companies (SME) there is no requirement with regard to compliance of

reports. They outsource this to an accountancy firm. Compliance is not necessary for business

continuity. Only when it brings cost reductions they will consider XBRL, or when others use it,

or when there are efficiency gains for the intermediaries. When the use of XBRL will be forced

by law, compliance will become a necessity.

The other 2% only use XBRL because they are obliged to do so.

The reason to use XBRL for being in control only works when the shift in the chain towards the

front is made with GL. This shift gives the means to track data flows. Continuous monitoring is a

goal for the organization. Continuous auditing uses CM for audit purposes. When accounting

firms require this from their clients they eventually have to implement it.

K.B. Khargi 275859 18 May 2011 39


Conditions

Actually there are no conditions for implementing XBRL; the companies don’t have a choice.

From accounting strategic point of view there is added value for the use of XBRL.

For bigger companies the use of XBRL GL will make the financial reporting supply chain more

transparent.

With the use of ERP the data is already standardized. So companies with ERP system will

consider the use of XBRL for internal use as “what are the costs to invest in it and what will we

gain from it?” So, they will chose for other options.

Successes and failures

The assumption is made that XBRL expansion will go naturally. But like good health, you have to

work for it, and like safe traffic there must be parties behind it that regulate things.

XBRL is an instrument in the business reporting chain automation. One has to consider who

benefits from it.

Now with the Dutch government this is set in motion.

In the US for 10.000 companies it is already mandatory to file their financial reports in XBRL for

three years now. In the beginning it was a matter of getting used to it, now they don’t know any

better. It is like the introduction of paying with you pin/ debit card.

XBRL has failed in a sense that everyone expected a high rate of adoption in short time.

In The Netherlands we have chosen for a broad approach with the SBR program. With SBR we

have a multiple domain approach. One constraint of this approach is that it takes a lot of effort

and time. But in the end there are different demanding parties where companies can file their

reports to in XBRL format. So, projects take more time than initially was expected, but there are

no known projects that were unplugged, because in the end the goal is a paperless office.

In Belgium they have chosen for a single domain approach. This is a much simpler approach; it

was simply changing a small part of the reporting chain and adjust is to XBRL for only one

demanding party. When they want to extend this it will cost more effort in the end, than a

multiple domain approach.

In England they have started from scratch with VPB on paper, towards paperless.

K.B. Khargi 275859 18 May 2011 40


Tooling

There are 7 or 8 tools that are used, which support the accountant; Unit4 for auditing, Caseware

for reporting, Afas, Exact, which are classical accounting tools. These tools are more on the

administrative side. Tools as Reeleeze which are web based are for both administrative as for

reporting purposes. What we see is that the domains are merging.

XBRL and CA

1.

2.

3.

4.

5.

6.

7.

8.

For transaction level there is GL. (Fujitsu)

Adoption

Research of adoption in different countries cannot be compared, because of the single/ multiple

domain approach, this is not comparable. In The Netherlands with the multiple domain

approach we aim for harmonization in standardization with a holistic approach. Example: 10

persons on vacation, all argue one time. In the end there is one solution, everybody agrees on.

Or you can add a person every time, and have the same discussion again and again…

So, The Netherlands soon will apply required reporting in XBRL in order to set a clear goal. This

will bring certainty on the focus and deadlines. The aim for The Netherlands is 2013. Banks will

free ride. So, this is only a push approach, certainly not pull.

Users in the US are also conservative; there is also a push situation, but there is also demand,

banks see efficiency gains.

In The Netherlands there are three banks that are waiting. They don’t place their pull yet. They

are already able to support the demand, but they are not willing to do so. They certainly have

gains, but are still hiding.

XBRL is hard to sell. It can be compared to the introduction of the barcode. It is a process that

only works within a network (like a phone), the more people use it the more useful it is. The

K.B. Khargi 275859 18 May 2011 41


barrier for the barcode was with the use by Albert Heijn1. This also will be the case with XBRL,

in the end. Regulation is the solution.

Future

For the future there will be a growth in electronic administration, also within smaller firms. This

endangers the role of the intermediaries; for accountants or administrative offices it will be a

matter of assembling already electronically available information for reports, for payments.

XBRL will grow, but also electronic standardization and computerization. Globalization is just a

matter of time.

6.1.2 Interviewee2


Interviewe2 is CEO at the company he works for, and strategic XBRL advisor. He also occupies

the position of vice chairman at XBRL Netherlands.

His daily work includes about 20% promotional activities for XBRL Netherlands and technical

support for partners in business. Furthermore, he is involved with product development and

judging XBRL projects, mostly within the government.

Background Company

The company’s business involves 100% XBRL activities; from developing and validating

taxonomies to reporting and viewing XBRL. They are a leading vendor of software solutions for

financial reporting and business monitoring based on semantics and XBRL. In this way they are

quite unique in the world. Most parties involved with XBRL only are active with one aspect, e.g.

(online) accounting packages.

The company exists for more than 10 years, nearly as long as XBRL was introduced. They were

involved in the world’s first XBRL implementation ever, and are pioneers in The Netherlands.

The Netherlands was the 4th country in Europe to start with XBRL.

XBRL Reasons

XBRL is not at all used for internal control.

The reason why XBRL is only used for external reporting is regulatory.

Companies only implement XBRL because of the legislation; they have to report to the

demanding parties in XBRL.

1 Albert Heijn: Dutch chain of supermarkets of the Ahold concern

K.B. Khargi 275859 18 May 2011 42


XBRL Conditions

The only condition for implementing XBRL is a by the government approved taxonomy. The

demanding party has to agree on it. And then you need software that is able to deal with XBRL.

Adoption

ERP software suppliers don’t have interest in XBRL; in itself ERP already uses the concept of

standardization. Although this is used for big enterprises and the standardization only applies

within the company. Implementing XBRL in an ERP system will take much time and the value of

benefits is negligible. Technically it is already possible, but it is in the hands of the software

suppliers to do something with XBRL.

Smaller types of companies and governments use packages for administrative purposes that

already use XBRL. But that is always a ‘save as’ function.

Projects

Eight years ago a project was started where XBRL was implemented over the whole business

report supply chain. This was within an assurance company. This lasted for two years:

unfortunately the company went out of business. But at that time it was too early for XBRL to

implement it at the internal side.

The time has come now and the company interviewee2 works for is able to offer the extra

facilities and support its clients. But, it is up to its clients to want to apply XBRL internally, and

that is not happening yet.

In Germany there was a test with synchronizing XBRL external as well as internally. These

included taxonomies and installing systems. The project failed because of people and politics;

differences among supervising authorities.

Now there is a project for straight trough compliance reporting in The Netherlands, but it is still

in an early phase of a proposal.

Barrier

A barrier is the lack of knowledge of how to design XBRL for internal use. The implementation

process must be well documented, and there is a lack of scientific papers on that topic.

Costs

K.B. Khargi 275859 18 May 2011 43


XBRL in itself is open source. For XBRL based software companies have to pay for the licenses to

use it. They are not the owner of such software, but have the right to use it then for a certain

period of time. Software that uses XBRL now are web based accounting packages.

Use of XBRL

Where the demanding parties such as the tax services and chamber of commerce are requiring

the companies to file their reports in XBRL format, for the use of XBRL internally, there is no

(independent) party that does so.

The success lies in several factors which all have to apply for the situation:

- Necessity

- An authority that can enforce the situation, like a CFO

- Budget and people available

- Time and planning

- A well defined goal or achievement

These are conditions for using XBRL in a CA environment.

Other countries

In Belgium they don’t use a holistic approach for XBRL. There is no added value in the way they

have implemented XBRL.

In the Netherlands the approach is much more suitable for broad implementation.

XBRL-GL

XBRL-GL is used at transaction level. That is one level down the process level. In practice

information has to be draught from different separate systems.

Most often with projects the initiative comes from the company’s side, not from the client’s.

The company is able to apply all functionalities, from beginning till the end. Continuous

auditing is not a point of focus, because there is no demand for it. However, control function are;

how does the accountants want to check and validate XBRL. GL is perfectly suitable for this with

its control modules. The question is what it is one wants to check. The urge needs to be created

that this is needed.

Future

K.B. Khargi 275859 18 May 2011 44


In 5 years the focus of XBRL usage will still be on the side of external parties. When we want the

use of XBRL for all companies, a lot of cleansing needs to be done first. When that is settled, the

focus can shift towards the internal use of XBRL. And in the end, that is where the added value of

XBRL lies.

K.B. Khargi 275859 18 May 2011 45


6.1.3 Interviewee3


Interviewee3 is the chairman of XBRL Netherlands. He has a RA and RE degree and promoted

on the topic professional judgment with payroll processes. Twice a week he works as partner

with a Big4 company. He is involved with a big international research on the topic who wants

assurance for the financial report with XBRL.

Change in reporting

The business community is on the eve of a singularity point; the information flow is now a push

mechanism, because firms think they know what is right for the social welfare, this was defined

in the first half of last century. But what is the value of the information in the reports for the

stakeholders? The growth of the financial report can be compared to a product life cycle. In the

current systems there is already a lot of data found. But there is no one who reads it. Only the

accountants say that a year report is needed.

A solution for this issue could be asking the audience what information they need. The rest can

be seen as spam. And spam could be different for different kinds of people. This approach is a

shift to the pull stream. Now regulations prescribe what the contents of the annual report must

be.

But, how to organize the new approach of pull stream? This must be considered through,

because now for a financial report the data is imported from maybe 6400 spreadsheets. A lot of

data is rekeyed and interpreted in different ways. Research shows that 88% of spreadsheets

contain errors and only 10% have controls. Therefore, in the end the data is not reliable.

Checks should be built in at the source of data. One solution for this is XBRL. XBRL divides

human language from computers. It is a strange concept of language for people; let computers

communicate and have only a viewer for humans.

The purpose is to qualify to the required data for the stakeholders. Now this is structured in an

instance document. XBRL makes it possible to input data and process it immediately, without

rekeying and errors. This is for the external side.

Internal processes: continuous auditing

When we take a look at internal processes, an international enterprise can be considered as

example; such a firm has a central general ledger with data from the daughter firms. These

daughters have divisions/ business units and these have processes. These levels can have

continuous auditing implemented.

K.B. Khargi 275859 18 May 2011 46

Multi national

Daughter 1 Daughter 2

BU 1 BU 2 BU 1 BU 2 CA

p p pppppp

Purchase order

Stock order Shipping order


Figure 12: continuous auditing at subsidiaries

An example of companies with CA is Siemens or IBM. They use continuous monitoring and know

exactly how processes run and are automated. A lot of data is being tagged when it enters the

systems. But this is not done with XBRL. The tags contain information about the data, and can do

simple calculations; adding and subtracting.

So, why should this data not be used for internal control measures? It is perfectly suitable; e.g.

when an invoice is received in XBRL, the numbers on it can be checked. But the first step is the

check of the Dutch taxonomy. Then a three-way match can be performed; that what is ordered is

also what is delivered and the prices are right.

Figure 13: Schema Example 3- Way match

K.B. Khargi 275859 18 May 2011 47


This three-way match can raise the level of assurance and therefore the reliability. Relations can

be interwoven within the tags.

Continuous monitoring

Continuous auditing can only be performed when continuous monitoring is implemented, that is

from the client’s point of view.

Accountants are risk averse. Entrepreneurs are risk taking, depending on the kind of business

more or less.

The role of accounting in continuous monitoring is checking where the gaps are; whether the

internal control measures and change management is right.

The accountants in this situation will have a number of own software which is used to drain

data from the clients systems and analyze that.

The essence of continuous auditing is finding out when a process runs well and recognizing

patterns; e.g. when 1000 invoices are received there can be some kind of pattern (the pattern

need not exist in practice, like fashion or a prototype of a new car).

Because of these patterns new positions in knowledge management can be created; this is

defining the prototype features of the process. Whit these features the new process is matched

with the old one. This can deviate by a targeted percentage, 2 or 5 %.

The pattern recognition can also vary at the end of the day and one have to check whether this

variation is still in line with the company’s strategy. When the prototype features shift

constantly there can be a fraudulent situation. The accountant then can check the whole dataset

of the control on the metadata from the continuous monitoring process.

Assurance

Assurance is now given once a year. But is this what the society wants? They want rather more

assurance whatever and whenever they want (JIT; just in time).

Also, the different target audiences have different demands for the level of assurance.

In practice IBM and Siemens are not using XBRL for continuous auditing yet, but they are

preparing. Now it is still a future perspective; that will come in 3 years.

Barrier

K.B. Khargi 275859 18 May 2011 48


But first, a turning point is needed; this is still hindered by the conventional way of acting.

People have to accept that computers communicate in a different way than humans. An example

of this is a pilot with filing profits to the tax services; in the old situation about 1600 data items

were sent from one firm. With XBRL this could be reduced to only 400 items. A lot of data is

redundant, like addresses when there is a fiscal number, but it is only human not to trust

something that they can’t understand. A solution for this is developing XBRL viewers for

humans.

Conditions for XBRL

Bear in mind what the stakeholders want; with the focus on sustainability they want a

dialogue, with a year report not.

Map the internal information need for all levels in the company (e.g. an ERP

implementation for 5-6 years).

Make a corporate data model with all databases that are used and pollution in these

databases.

Map the lack of knowledge within the firm, knowledge management. This also includes

what information exactly is given away to other parties with XBRL and what are the

consequences.

These conditions frighten off companies.

But the demand for seminars at companies rises, the awareness is starting to come.

The main idea of business is not up to date; one should forget a company’s processes as

different departments, but view processes as the money-to-money flow (COSO)

Within the firms people are reluctant and wondering whether their jobs will still exist in the

future. Jobs will disappear, but there will remain enough to do.

With cloud computing and XBRL, the activities for the accountants will change; they will have to

benchmark for smaller companies and be helpful to them. The accountants’ role shifts from

controlling towards giving advice. Within the SBR platform there is also enough to do.

Internal use of XBRL

XBRL is little used for internal purposes. First, acceptation is needed.

The barriers that exists are removed by the SBR platform, but it is not possible to do this all with

legislation e.g. that all commissionaires must sign.

K.B. Khargi 275859 18 May 2011 49


Reasons for implementing XBRL

Staying in control is for companies not a reason for implementing XBRL. Gains with efficiency

and effectiveness though, are reasons.

Another reason is the ageing of the population; more people are retiring soon, and firms are

getting ready to innovate the back office processes, while the few people left can be placed in

the front office.

Successes Failures

One major factor for success is the faith and belief of people.

Before the introduction on SBR in Australia they had several taxonomies per branch and

different versions, this approach failed. Now they have the SBR program.

In The Netherlands successful projects are at the tax services with the profit filings. More will

come when XBRL reporting will become obliged.

A project that used XBRL for internal processes was at Basic-life, an insurance company that

sold only on the internet.

Tools

For XBRL there are also tools like Caseware.

XBRL tools are not yet used for CA.

Conditions for CA

With regulations XBRL in CA will be a step closer, no matter a single or multiple domain

approach. This was already the case in Denmark and the UK.

SBR

SBR is only for the government, XBRL is more than that. But SBR is also stimulated for semi

government sectors, such as education and the water management boards.

Future

There are still actions that have to be taken by the software suppliers and accounting packages.

Trainings need also be developed.

But first there has to be a turning point. And when the right people are informed, and external

reporting in XBRL is settled, the next step will be using XBRL for internal processes.

K.B. Khargi 275859 18 May 2011 50


6.2 Middle level interviews: IT auditors

In this section the interviews with the middle level of XBRL people are elaborated. They work

for Big4 Companies or IT consulting companies as IT auditors. Three different interviews were

held. In order to be objective, the names of the interviewees and the company they work for

have been held anonymous.

6.2.1 Interviewee4

Background interviewee

Interviewee4 is program director XBRL/SBR for an IT consulting company. The company

operates not only on a conceptual level, but also on a technical level. They can do projects on a

solitary base, but also cooperative with other parties. Before his current position he worked as

an EDP auditor for 4 years, his background is in information flow.

His work now involves tooling, taxonomies, project management and all kinds of consultancy

activities.

Besides this he also teaches at the college for higher education in Amsterdam.

XBRL-GL

In the Netherlands the focus is not at GL.

GL is modular; the base taxonomy is COR and there are several extensions of which one is TAF

(tax audit), which contains concepts for fiscal checks.

The reason why the focus is not on GL is the well-known scandals around business reporting. At

first with XBRL the focus was on internal use, but after the scandals the focus with XBRL has

only been on external reporting.

Now the focus is slowly shifting. In the US it is now required to file reports in XBRL.

Process

The way the process of reporting works is this:

First a report on paper is transposed into XBRL. This contains inaccuracies.

With XBRL within systems, a report can still have errors.

There is a trend noticeable with software that is XBRL enabled. First the XBRL report was made

at the very last moment in the process. Now they try to tag data earlier in the process; still not

internal, within the systems of a business. But there is a shift. Perhaps in 3 years this could be

able on atom level.

K.B. Khargi 275859 18 May 2011 51


Projects

There are initiatives known as Wacoal.

There is a project at tax services where they want to replace their XML audit files for some

software that enables all transactions for VAT check. The situation now is that the software

works as the suppliers thinks is right, and only that is able with the software, what was on

beforehand agreed on.

But the tax services want to use the data for all kinds of new purposes.

The trajectory of this project is the same as with GL; the goal is one uniform standard. The issue

here is that the Dutch way of accounting and journal entries differs from that in the US.

Continuous Auditing

The worlds of CA and XBRL are slowly blending. But some conditions for this process are

maturity level, technique and a certain ‘enclosability’ . This can be compared with the evolution

of the internet; 20 years ago it was only able to show text and a picture, but people knew that

there was more possible and that it was still developing.

The same applies for XBRL; now with XBRL-FR and some business cases the basic techniques

are expanded. The market is still limited in the adoption of XBRL, but it is only a matter of time.

Benefits

Continuous auditing is one of the benefits of XBRL. The most important ones are that it provides

transparency (US GAAP) and consistency (knowing exactly where in the report, type of

currency). It is an ideal base for fully automated data processing.

An example; an intermediary has to deal with 50-60 software systems of all it client. This means

50-60 CAATs (Computer assisted auditing tools) interfaces. When there is one standard in the

world, switching between systems will become much easier.

Reasons

The reason why companies should implement XBRL in their internal processes is transparency

and consistency. But now XBRL is seen as required, but not a driver for business continuity.

There are many examples interviewee4 has seen as EDP auditor where it went wrong between

2 systems, and XBRL could have saved money:

With the introduction of IFRS the lease period became important. During a project at a client

there were doubts about the reliability of data; there were strange proportions. There were

K.B. Khargi 275859 18 May 2011 52


several regions using one system and the number 1 meant one year for one region, but one

month for another. The semantics were not defined here and that caused trouble. The lease time

contract was long due, but the devices were still used by clients. XBRL could have reduced these

mistakes of semantics and reduced the operational costs.

Another example was with the change of software tool with a small accounting firm and one of

the big4; in case of the first it took one year, and the latter only one weekend, because the old

system already used XML audit files.

There is a study conducted by the SEC about numbers of phone calls for clarifications on

numbers in reports before and after XBRL implementations. After XBRL implementation the

number of calls was reduced to nearly zero.

Conditions

XBRL is a means and not a goal. There must be a real business case, a necessity for XBRL and the

benefits and costs should be considered through.

Barrier

A hurdle for success is that real knowledge of XBRL is still limited. The focus is now on quantity

and not on quality.

The rightful place of XBRL is within a chain. But the situation now is that the link in the chain at

the front is missing. A solution could be making XBRL required. With this the chain will expand,

although one link in the chain itself may not provide from benefits of the use of XBRL.

Success/ Failure

If anything ever went wrong with a project that failed, it was because of the level of maturity.

That was too low.

For successful implementation of XBRL for internal use there has to be a balance between the

software suppliers and the market, companies that demand XBRL.

Results so far

Results are not yet quantifiable in amount of money. The results now are more qualitative;

faster tax filing, faster credit report to banks. Besides, result can be measured when there has

been a zero measurement before; in that case results can be compared. Now, it is more a feeling

that is not reasonable which says: “yes, there are benefits”.

K.B. Khargi 275859 18 May 2011 53


Tools

Tools could be built-in or a separate XBRL tool.

The example in the picture below illustrates the essence of GL.

Figure 14: The essence of XBRL GL

This situation could also be reached with an XML based situation and FR.

But while GL is contextless, he difference with FR is that it has a certain purpose; tax reports or

financial reports, and therefore used further in the flow.

SRDC stands for the summary reporting contextual data module. With this module it is possible

to specify the way in which individual transactions can be reconciled with the financial report.

Conditions for CA

Continuous auditing is only successful when data is reliable in a comparable situation as

described in the chart.

What also is needed is willingness from stakeholders.

An issue is that such an implementation requires data from the very depth of systems, that the

end of the lifecycle when considering acquisition of a new system is seen as a natural moment.

With FR this impact for companies is less, because this is only implemented the end of the chain.

To begin with, all systems must be able to communicate to each other in XBRL.

K.B. Khargi 275859 18 May 2011 54


Examples changing systems with Mergers/ Acquisitions:

Figure 15: Example of M&A , traditional way

Old/ Traditional situation:

A company using software A acquires a company using software B. Software B is replaced with

A for e.g. automobiles. Then the controlling company acquires another company using software

C. This is again replaced by software A. But the issue is that it is not only for automobiles, but

also motorbikes; this complicates the situation more than it already is.

New approach (Japanese company):

Figure 16: Example with XBRL GL

The controlling company acquires three different companies using different legacy systems. But

instead of replacing the systems the controlling company chose to build an interface based on

XBRL- GL for reporting and reconciliation.

K.B. Khargi 275859 18 May 2011 55


This new approach will be used more often in the future, because it’s a cheaper solution. It was

also used by the micro finance information exchange to gather data from all the countries that

are connected in the same XML based format.

This may seem like an easy solution but one reason why this approach is not widely adopted yet

is that XBRL is not mature enough yet; like the internet 20 years ago. Another reason may be the

existing systems and how open these are for XBRL implementation; it could take weeks or

perhaps months. And the taxonomy has to be defined, but then again once this is done, there is

no need to define this a second time. For GL it is simpler than FR, it could take about a month.

In the future XBRL-GL must be implemented more as described previous, then it will be possible

to perform continuous auditing. But this should be done in limited manner, because continuous

is not always right; CA is a reaction on something which seems not normal, this has impact on

the assurance, e.g. a small error in a report.

Adoption

Regarding the numbers of adoption merely, The Netherlands lag behind, because of the range of

ideas of harmonization. But with the SBR program The Netherlands is leading.

Soon there will be a push situation from the government, the decision has not been made, but

they are working on that. For now, there is a pull situation, but from the intermediaries, not the

companies.

The European Chamber of commerce (CESR) is investigating to require XBRL for all companies

on the stock market. So, the pressure also comes from that side.

Future

The future of XBRL is bright. It will be there, because in some foreign countries it is already

required and companies on the stock market have to report in XBRL.

The market is evolving and there will be fusions of software companies. In the end there will be

a number of them left.

It will also be good for the international concurrence position for The Netherlands, if they stay

in the race.

The fear of the intermediaries is that they will be taken over.

K.B. Khargi 275859 18 May 2011 56

FRGL

Organizational management

1 2 3 4 5


6.2.2 Interviewee5

Background interviewee

Interviewee5 is responsible for all XBRL projects within the company. Although their focus is on

digital reporting and the power of digital standards, besides XBRL, processes are taken into

perspective. The focus is also international, with an integrated approach. XBRL-GL is a part of

this.

XBRL-FR vs. XBRL-GL

FR is for open, external communication and therefore not competitive.

GL is for internal use, and for the reason of operational sensitivity, it is a competitive issues and

are companies reluctant about publishing about pilots with GL.

The company interviewee5 works for has been involved with a pilot for the tax services. They

are making it operational, although the maturity level is still low. A pilot with the drill down has

already been published about.

CA is not an issue for this case, that’s the next level.

When clients are still using spreadsheets, the rise of XBRL will not take off.

Figure 17: XBRL FR and GL within a firm

Dataflow within an organization

1. Received data; organization has no control over

2. Transaction recording; input from outside (e.g. purchase order) or from inside the

organization

3. Transaction processing; analyzing relations

4. Transaction reporting; internal (management reports) and external

5. Sending

K.B. Khargi 275859 18 May 2011 57


In the previous chart it is shown that FR is used in steps 3-5. It is possible that FR could be

implemented already in step 2. But why would an organization do so? Using FR at transaction

recording has no added value for the organization.

An ideal situation would be that both internal and external reporting are linked together. Now,

these two are diverged, by lacks in processes and media. But technically, in a digital way it is

possible. There are a number of concepts that have to be turned around.

Reasons

The companies where pilots are implemented are selected on innovativeness of the

management. These people have to be convinced of the effectiveness and efficiency of XBRL for

internal use, that it is only a matter of pushing the button. And there has to be a real business

case, demand from the organization.

Now reports are assembled for compliance reason. But if that is turned around and reports are

assembled for managerial purposes in an accurate way, then the compliance will also be.

One of the first steps for the management is finding out to whom the report is important, the

target group, and what information they are interested in.

On the long run XBRL will become a natural thing.

The steps towards such a situation have to be in the right order:

1. Theory: a concept has to be well defined.

2. Practice: solving problems with software, people understanding the concept

When there are some cases of successful implementation, the market will move towards

adoption.

Conditions

The situation now with the system landscape is, that several separate systems are linked

together.

XBRL is very consistent; it is black or white, and nothing in between. This is defined with a

taxonomy.

And an internal problem with the different systems is that one same concept is defined in a

different way in each system. Qualitatively this is not synchronized.

So the first thing to do is cleaning the information landscape; corporate data management:

harmonizing and synchronizing all the different definitions for one same concept.

So, this is a technical and conceptual condition, otherwise the fundament is not well.

K.B. Khargi 275859 18 May 2011 58


It is also a job for the software suppliers to build this in. Semansys does not work with GL yet.

Fujitsu has experience with GL in the US.

WACOAL in Japan used different legacy systems which were not flexible. They used GL to

harmonize for a specific situation.

Successes

Theoretically, the concept has to be well defined. And the time for the project has to be right

(replacement of old systems).

Corporate data management has to be done and management of tools. And there has to be some

kind of dictionary of the concepts, not yet a taxonomy, but a dataset of definitions, one way of

defining a concept. The condition for this is that the software is ready. This software has to read

the taxonomy.

Eventually software will be able to process the taxonomy, but until that day it will be inefficient,

for they are trying to avoid problems.

With regard to continuous monitoring, in the future it will be possible to tag data with a XBRL

label in a business unit. There is already software that does that, but without XBRL, this is a

‘rudimentary’ form of XBRL.

The focus of companies is making money and solving (short term) problems.

SBR

SBR is now in the early phase of implementations. This is mostly driven by the intermediaries,

not from the companies. There are not many companies that report directly to the demanding

parties in XBRL, there are no more than 5.

Requirement for reporting in XBRL only applies for corporate income taxes.

Tools

There are 3-4 XBRL software suppliers; Fujitsu, Altova, Semansys.

Fujitsu has also GL. They work with a holistic approach. Altova has no GL, although it may be

suitable. Semansys does not do anything with GL yet. They deliver what the clients want, and

that is not GL.

K.B. Khargi 275859 18 May 2011 59


Continuous auditing

XBRL-FR alone is already hard to implement, so XBRL for continuous auditing is a bridge too far.

The issue now is that it depends on what the clients want and do on the market. They are not

able to describe what is needed for an XBRL project; that is why intermediaries are needed.

There are two drivers for successful adoption of XBRL: regulatory obligation or demand from

the clients. And the latter will not be the one.

Software suppliers lack the vision, so any continuous auditing initiatives should come from the

largest intermediaries. Within large and midsized companies there is definitely a demand.

Intermediaries also see the demand for internal use.

Adoption

Countries as Belgium, Japan and Korea are not further in the adoption process than The

Netherlands. In Belgium XBRL is implemented for one specific domain, that was already digital.

In The Netherlands we are already far with the development of XBRL. The goal of the approach

was harmonization and therefore it is domain independent. The purpose was to reduce the

administrative burden.

The adoption in The Netherlands lag behind because of the broad approach, but in the end the

entrepreneurs will benefit from this. Chain reversal is the solution; until now the development

has come from the demanding parties, but when it comes from companies themselves, the

adoption rate will grow.

Such an approach is a precursor for successful continuous auditing/ monitoring, because

multiple aspects are needed for analyzing data. A domain independent approach is perfect for

this.

In The Netherlands there is now a push situation, but that is about to revolve. The government

should not be afraid to oblige reporting in XBRL. A condition is that the businesses are ready for

it. The role of the government is as a shepherd, and decisions are made for the greater good.

The costs are not very high compared to a average IT project.

So far the administrative burden has not been reduced, not for the report sending parties. The

benefits now are with the receiving parties.

K.B. Khargi 275859 18 May 2011 60


But GL will bring balance to this, when it will be included in the SBR program. The quality will

be higher because of the ability to drill down to transaction level. This link is now missing with

FR, most of the time this is still aggregated.

Future

Most probable, in 2013 reporting in XBRL will be regulatory obliged. Then higher numbers will

be reached. And when GL will be included in the SBR program, continuous auditing will also be

possible.

K.B. Khargi 275859 18 May 2011 61


6.2.3 Interviewee6

Background

Interviewee6 has been working for 30 years at the Big4 Company. At first 10 years as

accountant controller, then as EDP-auditor. For 6 years now he has a position directly under the

board, with the attention to assurance and IT. His focus has been on XBRL for 3 years now. He is

responsible for project management in Belgium and The Netherlands and works as coordinator,

also cross border.

Interviewee6 is also member of the SBR platform on tactical and strategic level. He is also

professor at the University of Tilburg.

The Big4 Company works with XBRL in two ways:

1. For SME they do the filing. These companies often have a package for accounting.

2. Providing assurance on XBRL documents. They filed the first XBRL report for another Big4

company ever. This was an compliance statement, there was no continuous assurance involved.

Current situation for SME

Client does its own accounting.

The trial balance is read into the accounting software.

Then mapping is done on paper. Because the definition is already in the trial balance, this

process is simultaneous to assembling the XBRL document.

But there is no efficiency gain for the companies with this approach.

GL

There are pilots with XBRL GL.

The problem with GL is that it takes 3-4 times more memory and processing. Cost is not a

barrier, because the added value is visible.

There are benefits on transaction level; checks on control measures and more complex analysis.

The situation now is that XBRL starts from the trial balance, not from transaction level.

The tax services are interested in replacing their XML audit files with XBRL GL.

But all this is still theory, when the technique is proven, then further expansion will go fast.

There are 2 projects

1. Deloitte succeeded, but it was not efficient. In the end an instance document was

created.

K.B. Khargi 275859 18 May 2011 62


2. Internal systems at the chamber of commerce and the tax services. This is still in a test

stage and there were many initiated problems, mostly with the software companies.

They are trying to embed as many as possible, with less as possible manual implementation and

all IT.

SBR history

SBR is an initiative from the government with the purpose to lessen the administrative burden.

There was said that it would save 750 million euro. But the real savings are not within the

companies, unless XBRL GL is implemented.

But for the intermediaries the paper flow will reduce. But they have to invest a lot in the portal

and certifications etc. There are not yet efficiency gains; only when everyone starts using XBRL,

there will be.

The real benefits are at the side of the demanding parties. They used to rekey numbers from

papers. Now they don’t anymore; but are the savings 750 million for the four demanding

parties? No, not for the chamber of commerce, and for the central bureau for statistics little. The

tax services are replacing one BAPI channel for another XBRL, so there is not much efficiency

gain. Will there be benefits for the clients of banks? No, they will probably not charge this. The

banks will retain the same fees by the hour, perhaps less hours, but the still high cost because of

the IT.

Tooling

Twinfield is an online accounting package that is busy with internal control, but not GL.

Within the company interviewee5 works for they use 2 kinds of XBRL tools one for reporting

(Unit4 ) and one for filing (Afas), both the packages have supplementary modules for XBRL.

For clients’ assurance of XBRL instance documents they use Semansys for reporting and

XBRLone for the online portal.

But everything is still done in a way that is ad hoc.

Conditions

The data model and processes have to be mapped well. In practice there are now many sub

administrations. The condition for XBRL GL and continuous auditing is one formalized data

model.

ERP systems like Baan or SAP have a data model that is useful for an average of 5 years. In the

meantime several other packages are acquired, so continuous auditing won’t work well. It is

K.B. Khargi 275859 18 May 2011 63


important to know exactly the information flow and quality of the data and being consistent is

also required.

This is the reason why large companies are not interested in XBRL.

With regard to XBRL and social responsibility they are interested, because there are not yet

systems for that purpose.

Adoption

There are two reasons why the adoption of XBRL in other countries seems to go quicker:

1. To make reporting in XBRL obligatory and have some kind of supervision for this.

2. In other countries they have one taxonomy per regulator, and it is fairly simple, like in

Belgium.

In The Netherlands it is not required by law to report in XBRL. But the SBR program is

developed to reuse data and this process gives a lot of discussion and delay.

The taxonomy and architecture are not yet efficient.

In the meantime the SBR discussion is still going on and regulations for the fiscal report are on

the agenda.

In Belgium they have one model for XBRL and in most other countries too.

Situation

XBRL is pushed from the side of the government and the intermediaries. The intermediaries

have the conditions that management of XBRL is organized and that there is demand for it. From

the government the demanding parties have the most benefits.

Future

For the SME eventually the use of XBRL (FR) will increase, when the commitment of the

government will be clear and the hurdles with the intermediaries will be taken away.

The large firms will be interested in GL and continuous auditing when their focus will be on

insights in control.

In 2013 even with partial regulations we will be one step closer.

K.B. Khargi 275859 18 May 2011 64


6.3 Bottom Level: Case studies

The intention for this section was to interview people within companies that have implemented

XBRL in internal processes in The Netherlands. But since the top level of XBRL Netherlands

pointed that there are no such projects yet, it is assumable that XBRL is not implemented in

internal processes in The Netherlands.

In order to capture the situation for the bottom level of the top-down approach, summaries of

case studies found in literature are documented in this section.

Information about these projects was already publicly available; therefore the names of the

companies are not made anonymous.

6.3.1 Wacoal

Background

Wacoal is one of Japan's leading manufacturers of women's apparel. Like many companies, its IT

systems had been added on an ad hoc, as-needed basis. The result of that was a patchwork of 32

independent legacy systems running on multiple platforms, including mainframes,

minicomputers, UNIX, and PC servers. Many of these systems were more than 10 years old, and

they were disbursed over 36 subsidiaries worldwide. These 32 different business application

systems (e.g. purchasing, sales, payrolls, etc.) provided data to 44 disparate accounting

subsystems, also running on multiple platforms. (Hitachi)

Project description

Wacoal adopted XBRL-GL as a common data format and used Hitachi’s XiRUTE Journalizing

Engine to automate the processing of data (e.g. journalizing, tax calculation, validation, etc.)

from the business application systems to the accounting subsystems that were consolidated into

one system. The financial system used was Oracle E-business Suite. This was the first case of

XBRL-GL implementation in the world.

Benefits of the New System

The new accounting system was successfully launched in April, 2003, and continues to

streamline operations at Wacoal. The new system has:

• Introduced flexibility into the IT system regarding extension and modification;

• Improved data quality significantly because of direct system-to-system feeds;

• Enabled real time reporting;

• Shortened the closing of accounts by two days;

• By complying with the XBRL standard, enabled XML compatibility with other data sources.

K.B. Khargi 275859 18 May 2011 65


Perhaps most important, implementation time was significantly less than with other

alternatives, such as ERP. Because the system tags the data in XBRL-GL, a user can extract data

using standard queries and report writers without special training or system expertise.

Previously, a question about purchasing would need to be routed to a person who had expertise

in extracting data from the purchasing system.

Challenges and issues

The legacy systems had several problems to be overcome. The business and financial systems

were built independently and lacked a concept of machine-to-machine connectivity. The

business systems (purchasing, sales, and wages management) were introduced at different

times and on various platforms and, therefore, lack the flexibility to extract the data for the

current business climate.

In addition, the financial system is a standalone system that requires information feeds from the

business system. The dataflow from the business system to the financial system was only

partially automated. This discontinuity created the following problems:

• Multiple uses of the data often required additional input of data to a second or third system

causing excessive labor cost, loss of data quality, and timing problems.

• When problems occurred in the financial system, it was hard to pinpoint the exact cause,

increasing the difficulty of the repair.

• Several different business rules introduced intolerable errors into the system.

• Items extracted from different legacy systems were calculated based on different logic even

for the same data.

Wacoal chose Hitachi XBRL GL auto-journalising system. The XBRL GL auto-journalising system

has two layers: XBRL GL conversion engine and add-ons. The XBRL GL conversion engine

converts the output documents from the business systems into an XBRL GL file ready for direct

input into the financial systems. This conversion uses Wacoal’s existing business rules, which

are implemented as an “add-on.”

This double layer structure of the XBRL GL auto journalising system enables system developers

and customer companies to introduce an XBRL system quickly and at low cost, needing only to

describe their unique business rules into the add-on. Easy to construct, the system is also easy

K.B. Khargi 275859 18 May 2011 66


to modify when a change in business rules occurs, which is the significant advantage over

traditional hard-coded systems.

Future

The XBRL-GL system provides Wacoal with the ability to plan for additional system

enhancements such as an ERP system. A future upgrade to the purchasing system can be

quickly implemented because the system’s output, coded in XBRL-GL, will automatically be

compatible with the present system.

(Whitepaper Hitachi; http://www.xbrl.org/nmpxbrl.aspx?id=90)

K.B. Khargi 275859 18 May 2011 67

http://www.xbrl.org/nmpxbrl.aspx?id=90


6.3.2 Project Basic-life

Background

Basic-life NV, a subsidiary of ASR, the Dutch insurance division of the large Fortis financial

conglomerate, started its activities in November 1999. This was done in a virtual way; the

company was built around the possibilities of IT. The firm outsourced all activities that did not

belong to the core of a life insurer; product development and sales support. The rest was done

by third parties, providing services under the basic-life label. Such as admin, medical

acceptance, fund management etc. Basic-life’s vision was clear, simple and fast. A modern

architecture was chosen where all third parties communicated through the Internet. The web-

site was a crucial communication medium to intermediaries as well as customers, who could for

example manage their investment portfolio through the web. The proposition was to be fast,

error-free and transparent. (http://www.semansys.us/basic.html)

Implementation

In close cooperation between Basic-life, Semansys and E&Y the XBRL pilot project had been

performed. The production process had been charted and analysed for bottle necks and

vulnerabilities. Semantic modeling had been used to do the requirements analysis. A one day

interactive session proved to be more than sufficient to come up with a complete model

including all the required reporting functionality. The data was analysed, the optimal data

model defined and the available data was transformed into this model. The actual transition

took no more than 4 consultancy days. Meanwhile consultants of E&Y built two taxonomies,

which defined the meaning of the reported figures; one taxonomy for external, and one for

internal reporting. After a short introduction to the user community the system was taken into

production. All parties in the triangle spent about 10 days on this project. The whole

implementation process took no more than 30 days in a time period of about two months.

Project Objectives / Success factors

· Monitoring insurance processes across companies

· Assuring scalability in automated processes

· Internal reporting required within 3 days from the close of the quarter

· Daily reliable insight in performance of entire value chain

· Extensible to accommodate new partners in value chain

(http://www.xbrl.org/nmpxbrl.aspx?id=93)

K.B. Khargi 275859 18 May 2011 68



Monitoring and reporting

It had been the accountant E&Y who introduced XBRL and Semansys to Basic Life. XBRL was in

its first stages, but Semansys' early implementation showed the benefits of XBRL for allowing

completely automated production and reporting process. Based on a true belief in the virtues of

XBRL, Basic-life decided to use this standard for solving the challenges around performance

measurement across all parties in the virtual company.

Each transaction, as it was handled by the central administration system Life-Fit, was stored in a

so called 'Operational Data Warehouse' (ODW). All players in the process had access to this Data

Warehouse for customer service purposes. XBRL was used to drain the input and output of Life-

Fit and the ODW into a Control and Management Data Warehouse. This allowed to have full

control of the process and to do daily monitoring, management reporting as well as continuous

auditing. They could judge - by pushing a button - the timeliness of a commission payment to an

intermediary. This was a measure based on data from separate systems which could then be

combined and evaluated instantly.

Issues

The system was designed to recognize patterns of stocks and bonds. At that time the computers

could not handle the capacity that was needed.

Systems now are faster, a constraint currently would be calculations in the link base, which take

almost 90%.

No Future

Unfortunately Basic Life does not exist anymore. The XBRL project ran for 2 years.

K.B. Khargi 275859 18 May 2011 69


6.3.3 Microfinance Information eXchange (MIX)

Background company

Established in 2002, Microfinance Information Exchange (MIX) is a nonprofit organization with

headquarters in Washington, DC, and regional offices in Peru, Senegal, India and Indonesia. MIX

provides detailed financial and social performance information from microfinance institutions

(MFIs), as well as business information from market facilitators and donor organizations and

investors in microfinance. MIX was founded by CGAP (Consultative Group to Assist the Poor)

and is sponsored by Citi Foundation, Deutsche Bank Americas Foundation, International Fund

for Agricultural Development (IFAD), and the Bill & Melinda Gates Foundation.

(http://www.microcapital.org/microcapital-brief-xbrl-international-publishes-case-study-

from-the-microfinance-information-exchange-mix/)

Background XBRL project

Microfinance sectors are microcosms of the formal financial sector. The reporting entities are

the institutions providing financial services to the poor and some national and international

networks of microfinance institutions that act as aggregation points. The audience includes the

same reporting entities, along with microfinance investors and donors, microfinance rating

agencies, academic researchers, and regulators focused on the microfinance sector. Healthy

microfinance sectors require each of these actors to easily exchange information.

Reporting entities have limited technical capacity and no familiarity with XBRL. The historical

reporting process was hands-on and labor-intensive, involving manual transfer and

consolidation of data from audited financial statements, Excel documents, online submissions

and other sources. The landscape of management information system (MIS) providers serving

microfinance institutions is fragmented, with many small shops serving monetary financial

institutions in different regions. While an increasing number of institutions are formally

regulated, there are still substantial gaps and limited public information even where there is

regulatory oversight. Since reporting is completely voluntary, MIX needed to ease the reporting

burden as much as possible in order to maintain participation.

XBRL implementation

The use of XBRL affected our entire data process flow. We moved to a new data collection

platform to allow the creation of XBRL documents based on our taxonomy. We restructured our

database to reflect the updated data model and to allow extraction and aggregation of content

K.B. Khargi 275859 18 May 2011 70

http://www.microcapital.org/microcapital-brief-xbrl-international-publishes-case-study-from-the-microfinance-information-exchange-mix/



directly from XBRL documents. We had a head start on understanding XBRL through use of an

XBRL-based data processing and benchmarking system which was operational from 2006 to

2008. The changes to our data collection and processing also affected the data presentation and

analysis options for the public.

MIX chose to develop an XBRL taxonomy based on International Financial Reporting Standards

(IFRS).The MIX Microfinance taxonomy received recognition from XBRL International as the

first acknowledged extension of the current IFRS taxonomy. MIX adopted a data-driven

approach for the taxonomy, rather than a forms-driven approach, and IFRS was also well-suited

for this purpose. They used dimensions to help capture a diverse range of disclosures and

varying depth of data in many interest areas. For instance, they used dimensions to provide

breakouts of primary concepts by gender, by microfinance products, and by geographic focus of

services. They did not use formulas due to the lack of an approved formula specification when

they launched the taxonomy development.

MIX made a strategic decision at the start of this development to license off-the-shelf software

whenever possible and to avoid custom development. They anticipate that increased global

adoption of XBRL will lead to market competition and more and better software solutions over

time. To that end, they licensed two products from Rivet Software: CrossTag, for creation of

XBRL documents using the MIX Microfinance Taxonomy, and the Rivet XBRL Loader, to ‘shred’

XBRL documents for aggregation. MIX chose these applications because of their relative user-

friendliness and because they enable us to maintain a modular solution which we could upgrade

over time (rather than an end-to-end solution). They also had in-house database development

work for data post-processing (currency conversion, ratios calculation).

This project was lounged in late 2008. MIX’s extension taxonomy, based on the most recent IFRS

taxonomy, was ready for production (in working draft form) by the end of Q1 2009. The XBRL

data collection process was fully functional by the middle of Q2 2009. The MIX Market website

(www.mixmarket.org) presenting XBRL-powered data was up and running by the end of Q2

2009. Benchmarking and analysis functions were online by the end of Q3 2009.

Results

• XBRL allowed presenting much deeper data on microfinance institutions.

• The use of a flexible XBRL data model has allowed MIX to model many additional data

sets delivered from the same resource base.

K.B. Khargi 275859 18 May 2011 71


• Creation of a single XBRL taxonomy allowed to harmonize previously scattered

standards, and to provide a concrete means of communicating this model to

stakeholders.

• Use of XBRL has made the current barrier to providing data a bit higher, given the lack of

XBRL tools available for the broader microfinance community. However, this is an

expected result until MIX can better communicate about standards and distribute

systems more broadly (especially online).

Lessons learned from the project

- Mix does not need XBRL end-to-end (yet). The primary benefits of XBRL for MIX have been on

organizing and modeling data. XBRL is not yet used for data presentation, but this is partially

due to the limited current use cases within the microfinance community. It is expected that the

capabilities for aggregating and rendering XBRL information will only improve over time and

MIX can leverage these as they become available.

- Use work that others have done. There are many XBRL resources out there and many groups

working to solve the same types of problems. Consulting with the broader community makes

development easier and has spillover benefits for everyone involved.

- Build in flexibility. XBRL is changing rapidly. Try and anticipate on changes and not paint

oneself into a corner in terms of solutions. MIX employed a data-driven approach to data

modeling and a modular approach to their systems architecture to maintain flexibility.

Future

- MIX plans to refine the use of their XBRL taxonomy. There are minor changes to presentation

and some additional elements to consider. They want to model more non-financial information,

especially relating to the social mission of some microfinance providers. They plan to better

incorporate extension taxonomies to accommodate more variations in local standards.

- The current model is to collect data directly from microfinance institutions. However, this is

labor-intensive. They would like to leverage other naturally-occurring data flows within the

microfinance sector (to regulators, to investors, from MIS providers) while also facilitating these

flows through the dissemination of technology innovations.

- MIX needs to investigate options to push XBRL further through our data process flow, in

particular for aggregation and online rendering of XBRL content

(MIX, 2010)

K.B. Khargi 275859 18 May 2011 72


7 Analysis

In this chapter the analysis of the gathered data from the interviews is elaborated. This chapter

is divided into sections corresponding to the sub questions and the aspects of the questionnaire

used for the interviews. Per aspect is presented what was mentioned during the interview about

that certain topic and what was found in literature.

7.1 Internal use of XBRL

After reading literature about continuous auditing and XBRL (GL), the impression had been

made that this would be already implemented at companies in The Netherlands. But

unfortunately, this is not the case. In the early days of XBRL experts mentioned that XBRL could

trigger continuous auditing, and this statement was copied by in many papers over the decade.

There were only a few projects that involved XBRL for internal use worldwide.

Projects where XBRL was used in internal processesCountry Organization Period SummaryJapan Wacoal April 2003- now Enable consolidation of 36 subsidiaries

by integrating 32 independent legacy systems to a new accounting system using XBRL GL

Several: HQ in USA

Microfinance Information eXchange

late 2008- now Ease reporting burden from monetary institutions from all participating countries to the diverse audience using XBRL GL

Netherlands Basic Life 2003-2005 Implementing XBRL GL in order to be fast, error-free and transparent

Netherlands Tax Services 2011 (not yet published about)

Replacing XML audit files for better data analysis and other calculations.

Netherlands Rabobank 2011 Still in a proposal phaseFigure 18: Projects where XBRL was used in internal processes

All of the experts interviewed for this research mentioned that using XBRL internally is not an

issue for companies in The Netherlands. It is seen as problematic and costly by the companies. It

is expected that when the frequency of XBRL usage will increase the shift towards the front of

the chain will occur. First, acceptation is needed; this will result in a higher rate of adoption. The

expectation is that this will happen once reporting in XBRL will become mandatory.

Concluding

K.B. Khargi 275859 18 May 2011 73


Although from literature it seems that XBRL is already used for internal purpose, in practice this

is not the case in The Netherlands.

7.2 Reluctance of firms

From the interviews held for this research some reasons why companies are reluctant to use

XBRL for their internal processes are mentioned. These reasons were not found in literature;

that was only focus on reasons why one should use XBRL.

Lack of focus

The reason why the focus is not on XBRL GL and internal processes is the well-known

accounting scandals around business reporting. At first with the development of XBRL the focus

was on internal use, but after the scandals the focus with XBRL has only been on external

reporting. Now the focus is slowly shifting again.

For SME compliance is not necessary for the business continuity. Only when it brings cost

reductions they will consider using XBRL, or when others use it, or when there are efficiency

gains for the intermediaries. Staying in control is for companies not a reason for implementing

XBRL Continuous monitoring/ auditing is not an issue for most companies.

ERP systems

Large companies stick to the (ERP) systems they already use; the data is already standardized.

Shifting the focus to the front end of the chain with XBRL GL, only works when there are clear

efficiency gains for the firm. Implementing XBRL GL causes major adjustments in business

processes. And companies will therefore wait for a natural moment for replacing the systems.

ERP software suppliers don’t have interest in XBRL; in itself ERP already uses the concept of

standardization. Although this is used for big enterprises and the standardization only applies

within the company. Implementing XBRL in an ERP system will take much time and the value of

benefits is negligible. Technically it is already possible, but it is in the hands of the software

suppliers to do something with XBRL. And they will only do so, when the customers demand

that.

It is important to know exactly the information flow and quality of the data and being consistent

is also required. This is the reason why large companies are not interested in XBRL. Because of

K.B. Khargi 275859 18 May 2011 74


all the legacy systems of ERP system and sub administrations with spreadsheets used by large

companies, it will take a lot of time and effort to map this.

Lack of academic research

A barrier is the lack of knowledge how to design XBRL for internal use; real knowledge of XBRL

is still limited. The focus is on quantity and not on quality. The implementation process must be

well documented, and there is a lack of scientific papers on that topic. But all this is still theory,

when the technique is proven, then further expansion will go faster.

Technical issues

Although the technique is ready, as seen with the Wacoal project, the problem with XBRL GL is

that it takes more memory and processing. And before implementing XBRL internally cleaning

pollution in databases is needed.

Another challenge could be that the Dutch method of accounting and journal entries differs from

that in the US.

The situation now is that XBRL starts from the trial balance, not from transaction level.

Business Reporting Chain

The rightful place of XBRL is within a chain. But the situation now is that the link in the chain at

the front is missing. The demanding parties, at the rear of the chain, such as the tax services and

chamber of commerce are requiring the companies to file their reports in XBRL format. For the

use of XBRL internally, there is no (independent) party that does so. This could be the job of a

CFO, but they don’t focus on the use of XBRL internally yet.

Figure 19: BRSC and XBRL and lack of regulating parties in the front

K.B. Khargi 275859 18 May 2011 75

Business Operations

Internal Financial Reporting

External Finacial

Reporting

Investments and Lending

AnalysisNo parties that

regulate

Demanding parties

are Regulators


K.B. Khargi 275859 18 May 2011 76


Concluding

There are various reasons why XBRL is not used by companies for their internal processes.

These reasons were not found in literature, but the experts that were interviewed mentioned

that the focus is now on external reporting and doing that right for the demanding parties.

There is no party that supervises XBRL for internal use. Companies still wait for more academic

research. Large companies that use ERP systems there is no urge to shift to XBRL; the data is

already standardized and they are able to report in XBRL. Preparing for such a project takes a

lot of effort and time with the cleansing of databases.

7.3 Benefits of the internal use of XBRL

From both literature and the interviews benefits why companies should use XBRL within their

internal processes were gathered. This are the benefits for internal XBRL use found in literature,

these were already elaborated on in section 2.5:

Improving data analysis

Better risk assessment

Accelerated implementation of continuous auditing

Improved internal controls

Reducing spreadsheet proliferation

Furthermore, there are benefits that were mentioned in the interviews. The first two confirm

what was found in literature. The last was not mentioned at all in literature.

Track data flows

The reason to use XBRL for being in control only works when the shift in the chain towards the

front is made with GL. This shift gives the means to track data flows. Continuous monitoring is a

goal for the organization. Continuous auditing uses CM for audit purposes. When accounting

firms require this from their clients they eventually have to implement it.

Transparency and efficiency

Continuous auditing is one of the benefits of XBRL. The most important ones are that it provides

transparency (US GAAP) and consistency (knowing exactly where in the report, type of

currency). It is an ideal base for fully automated data processing. When there is one standard in

the world, switching between systems will become much easier.

K.B. Khargi 275859 18 May 2011 77


Relatively low costs

The costs are not very high compared to an average IT project. So far the administrative burden

has not been reduced, not for the report sending parties. The benefits now are with the

receiving parties. But GL will bring balance to this, when it will be included in the SBR program.

The quality will be higher because of the ability to drill down to transaction level.

Reorganizing back office

Another reason is the ageing of the population; more people are retiring soon, and firms are

getting ready to innovate and automate the back office processes, while the few people left can

be placed in the front office.

Concluding

There are many benefits for the use of XBRL mentioned in literature. These benefits are mostly

about what XBRL can enable in theory; improving data analysis because of the ability to track

data, better risk assessment, accelerated implementation of continuous auditing, improved

internal controls, and reducing spreadsheet proliferation. In practice this is not found in The

Netherlands, because XBRL is only used for external reporting. Other reason, that was not stated

in literature, but mentioned by the interviewees are the relative low cost, and the automation of

back office processes, because of aging of the employees.

K.B. Khargi 275859 18 May 2011 78


7.4 Conditions

These are conditions for using XBRL in a continuous auditing environment/ for internal

processes of a company. These were gathered from the interviews. The conditions are divided

into several categories; general conditions (change in perspective), and conditions for the

companies themselves and the software suppliers.

Change in perspective

The focus of companies is making money and solving (short term) problems. The main idea of

business is not up to date; one should forget a company’s processes as different departments,

but view processes as the money-to-money flow (COSO).

Now reports are assembled for compliance reason. But if that is turned around and reports are

assembled for managerial purposes in an accurate way, then the compliance will also be. Chain

reversal is the solution; until now the development has come from the demanding parties, but

when it comes from companies themselves, the adoption rate will grow.

A turning point is needed in the way people look at accounting; this is hindered by the

conventional way of accounting. People have to accept that computers communicate in a

different way than humans. A lot of data is redundant but it is only human not to trust

something that they can’t understand. There are already solutions for this problem; XBRL

viewers for humans.

Within the firms people are reluctant towards automation and wondering whether their jobs

will still exist in the future. Jobs will disappear, but there will remain enough to do.

With cloud computing and XBRL, the activities for the accountants will change; they will have to

benchmark for smaller companies and be helpful to them. The accountants’ role shifts from

controlling towards giving advice. Within the SBR platform there is also enough to do.

Companies

The companies where pilots with XBRL GL are implemented management that is innovative.

These people have to be convinced of the effectiveness and efficiency of XBRL for internal use.

They have to consider that XBRL is a means and not a goal.

K.B. Khargi 275859 18 May 2011 79


The success lies in several factors which all have to apply for the situation:

- Necessity; a real business case

- An authority that can enforce the situation, like a CFO

- Budget and people available

- Time and planning

- A well defined goal or achievement

These are steps that companies have to take before implementing XBRL internally:

Bear in mind what the stakeholders want; find out to whom the report is important, the

target group, and what information they are interested in. with the focus on

sustainability they want a dialogue, with a year report not.

Map the internal information need for all levels in the company

Make a corporate data model with all databases that are used and clean pollution in

these databases; harmonize and synchronize all the different definitions from several

systems for one same concept.

Map the lack of knowledge within the firm knowledge management. This also includes

what information exactly is given away to other parties with XBRL and what are the

consequences.

Software Suppliers

It is a job for the software suppliers to build in the possibilities to use XBRL for internal

purposes. From the interview it seems that technically it is already possible to do so. But the

software suppliers are waiting for the demand for XBRL GL, instead of anticipating. The largest

XBRL software supplier in The Netherlands, Semansys, does not work with GL yet. Fujitsu has

experience with GL in the US.

Corporate data management has to be done and management of tools. And there has to be some

kind of dictionary of the concepts, not yet a taxonomy, but a dataset of definitions, one way of

defining a concept. The condition for this is that the software is ready. This software has to read

the taxonomy.

Eventually software will be able to process the taxonomy, but until that day it will be inefficient,

for the software suppliers are trying to avoid problems.

K.B. Khargi 275859 18 May 2011 80


Concluding

Conditions before XBRL could be applied in a continuous auditing environment can be divided

in three categories; change in the general perspective of traditional accounting is required. For

companies there are steps to be taken in preparation of using XBRL for internal purposes.

Software suppliers should be more proactive and anticipate on the development and not wait

for the customers for their demands.

7.5 Successes and failures

XBRL has failed in a sense that everyone expected a high rate of adoption in short time.

In The Netherlands we have chosen for a broad approach with the SBR program. With SBR we

have a multiple domain approach. One constraint of this approach is that it takes a lot of effort

and time. But in the end there are different demanding parties where companies can file their

reports to in XBRL format.

The goal of the SBR program was to reduce the administrative burden. This is achieved only

partly and only for some of the demanding parties, certainly not for the filing companies.

The experts that were interviewed had no experience with XBRL projects that really failed. One

person mentioned that if anything ever went wrong with a project that failed, it was because of

the low level of maturity of the organization.

For successful implementation of XBRL for internal use there has to be balance between the

software suppliers and the market, companies that demand XBRL.

K.B. Khargi 275859 18 May 2011 81

Demanding Parties

Software Suppliers Market/ Firms


Figure 20: balance between all XBRL parties

Concluding

With the SBR program The Netherlands succeeded in developing an approach that is domain

independent. Although the expected benefits are not yet reached, there are no projects that

failed. But all projects so far regarded XBRL for external reporting.

7.6 Continuous auditing and XBRL

From literature as well as from the interviews it appears that XBRL is suitable for continuous

monitoring/ auditing purposes. But this is all theory, there are no cases known in practice

where XBRL is used for continuous auditing or monitoring.

Continuous auditing can only be performed when continuous monitoring is implemented,

because the data that is analyzed is gained from continuous monitoring processes. (See chapter

3).

Continuous monitoring

With regard to continuous monitoring, in the future it will be possible to tag data with a XBRL

label in a business unit. There is already software that does that, but without XBRL, this is a

‘rudimentary’ form of XBRL. The condition for XBRL GL and continuous auditing is one

formalized data model.

The role of accounting in continuous monitoring is checking where the gaps are; whether the

internal control measures and change management are right. The accountants in this situation

now will have a number of own software which is used to drain data from the clients systems

and analyze that. The essence of continuous auditing is finding out when a process runs well

and recognizing patterns.

An example of companies with continuous auditing is Siemens or IBM. They use continuous

monitoring and know exactly how processes run and are automated. A lot of data is being

tagged when it enters the systems. But this is not done with XBRL. The tags contain information

about the data, and can do simple calculations; adding and subtracting.

K.B. Khargi 275859 18 May 2011 82


Why should this data not be used for internal control measures? It is perfectly suitable; e.g.

when an invoice is received in XBRL, the numbers on it can be checked. But the first step is the

check of the Dutch taxonomy. Then a three-way match can be performed; that what is ordered is

also what is delivered and the prices are right. This three-way match can raise the level of

assurance and therefore the reliability. Relations can be interwoven within the tags.

Continuous auditing is not a point of focus, from the view of the XBRL market; there is no

demand for it. However, control functions are; how does the accountants want to check and

validate XBRL. GL is perfectly suitable for this with its control modules. The question is what it

is one wants to check. The urge needs to be created that this is needed.

From accounting strategic point of view there is added value for the use of XBRL. For bigger

companies the use of XBRL GL will make the financial reporting supply chain more transparent.

XBRL-GL is used at transaction level. That is one level down the process level. In practice

information has to be draught from different separate systems.

Assurance

Assurance is now given once a year. But is this what the society wants? They want rather more

assurance whatever and whenever they want (JIT; just in time). Also, the different target

audiences have different demands for the level of assurance.

Conditions for continuous auditing

The worlds of continuous auditing and XBRL are slowly blending. But some conditions for this

process are maturity level, technique and a certain ‘enclosability’ . This can be compared with

the evolution of the internet.

Continuous auditing is only successful when data is reliable. An issue is that such an

implementation requires data from the very depth of systems, that the end of the lifecycle of a

system is seen as a natural moment to replace it.

With XBRL FR this impact for companies is less, because this is only implemented the end of the

chain.

K.B. Khargi 275859 18 May 2011 83


Role of intermediaries

XBRL-FR alone is already hard to implement, so XBRL for continuous auditing is a bridge too far.

The issue now is that it depends on what the clients want and do on the market. They are not

able to describe what is needed for an XBRL project; that is why intermediaries are needed.

There are two drivers for successful adoption of XBRL: regulatory obligation or demand from

the clients. And the latter will not be the one.

Software suppliers lack the vision, so any continuous auditing initiatives should come from the

largest intermediaries. Within large and midsized companies there is definitely a demand.

Intermediaries also see the demand for internal use.

Concluding

As was found in literature and confirmed by the interviewees, continuous auditing software

does not use XBRL and XBRL is not used for continuous auditing processes.

There are cases know (Siemens, IBM) where continuous auditing is successfully implemented.

In these cases XBRL is not used for this process. Continuous auditing therefore can be

implemented successfully without XBRL. In itself XBRL can be used without continuous

auditing. But both literature as well as the people interviewed agreed that the added value of

XBRL lies in the internal use.

K.B. Khargi 275859 18 May 2011 84


7.7 Tools

XBRL tools are not yet used for CA. And CA tools that were mentioned in chapter 3 do not use

XBRL.

There are 3-4 XBRL software suppliers; Fujitsu, Altova, Semansys. Fujitsu has also XBRL GL.

They work with a holistic approach. Altova has no GL, although it may be suitable. Semansys

does not do anything with GL yet. They deliver what the clients want, and that is not GL.

Tools could be built-in in other systems or a separate XBRL tool. There are tools that use , which

support the accountant; Unit4 for auditing, Caseware for reporting, Afas, Exact, which are

classical accounting tools. These tools are more on the administrative side. Tools as Reeleeze

which are web based are for both administrative as for reporting purposes. What we see is that

the domains are merging. Twinfield is an online accounting package that is busy with internal

control, but not GL.

But much is still done in a way that is ad hoc.

Concluding

XBRL tools are not yet used for CA. And CA tools that were mentioned do not use XBRL.

K.B. Khargi 275859 18 May 2011 85


7.8 Adoption of XBRL

What was found in literature about the adoption of XBRL is already described in section 2.6 of

this thesis. Beneath the relevant remarks from the interviews are noted.

There are two reasons why the adoption of XBRL in other countries seems to go quicker:

1. To make reporting in XBRL obligatory and have some kind of supervision for this.

2. In other countries they have one taxonomy per regulator, and it is fairly simple, like in

Belgium.

In The Netherlands it is not yet required by law to report in XBRL. But the SBR program is

developed to reuse data and this process gives a lot of discussion and delay.

The taxonomy and architecture are not yet efficient

In Belgium they have chosen for a single domain approach. This is a much simpler approach; it

was simply changing a small part of the reporting chain and adjust is to XBRL for only one

demanding party. They don’t use a holistic approach for XBRL. There is no added value in the

way they have implemented XBRL. When they want to extend this it will cost more effort in the

end, than a multiple domain approach.

In The Netherlands with the multiple domain approach we aim for harmonization in

standardization with a holistic approach. This approach is much more suitable for broad

implementation.

Regarding the numbers of adoption merely, The Netherlands lag behind, because of the range of

ideas of harmonization. But with the SBR program The Netherlands is leading.

Soon there will be a push situation from the government, the decision has not been made, but

they are working on that. For now, there is a pull situation, but from the intermediaries, not the

companies.

The European Chamber of commerce (CESR) is investigating to oblige XBRL for all companies

on the stock market. So, the pressure also comes from that side.

The multi domain approach is a precursor for successful continuous auditing/ monitoring,

because multiple aspects are needed for analyzing data. A domain independent approach is

perfect for this.

K.B. Khargi 275859 18 May 2011 86


Concluding

The multi domain approach in The Netherlands with the SBR program initially seemed to cause

a lagging position regarding the use of XBRL. But now the benefits for harmonization and

standardization are becoming visible.

7.9 Current situation of XBRL in The Netherlands

XBRL expansion is still in the first stage where a bolt-on approach is used. This means that

implementation is applied only at the rear end of the reporting supply chain. Most often this is

an aggregated process, where existing data is converted into XBRL.

Smaller types of companies and governments use packages for administrative purposes that

already use XBRL. But that is always a ‘save as’ function.

The business community is on the eve of a singularity point; the information flow is now a push

mechanism, because firms think they know what is right for the social welfare, this was defined

in the first half of last century. The value of the information in the reports for the stakeholders

need to be reconsidered A solution for this issue could be asking the audience what information

they need. This approach is a shift to the pull stream. Now regulations prescribe what the

contents of the annual report must be.

SBR

SBR is now in the early phase of implementations. This is mostly driven by the intermediaries,

not from the companies. There are not many companies that report directly to the demanding

parties in XBRL, there are no more than 5.

SBR is only for the government, XBRL is more than that. But SBR is also stimulated for semi

government sectors, such as education and the water management boards.

Current situation for SME

Clients do their own accounting. The trial balance is read into the accounting software.

Then mapping is done on paper. Because the definition is already in the trial balance, this

process is simultaneous to assembling the XBRL document. But there is no efficiency gain for

the companies with this approach.

K.B. Khargi 275859 18 May 2011 87


The real benefits in the current situation are at the side of the demanding parties. They used to

rekey numbers from papers.

Results so far

Results are not yet quantifiable in amount of money. The results now are more qualitative;

faster tax filing, faster credit report to banks. Besides, result can be measured when there has

been a zero measurement before; in that case results can be compared. Now, it is more a feeling

that is not reasonable which says: “yes, there are benefits”.

Concluding

With the SBR program in The Netherlands with the bolt-on approach, the focus is still on the

rear end of the business reporting supply chain, and XBRL is used for external reporting only.

Most often this is done with a “save as” method.

7.10 Future

These are the statements made by the interviewees regarding the future of XBRL.

For the future there will be a growth in electronic administration, also within smaller firms. This

endangers the role of the intermediaries; for accountants or administrative offices it will be a

matter of assembling already electronically available information for reports, for payments.

XBRL will grow, but also electronic standardization and computerization. Globalization is just a

matter of time.

In 5 years the focus of XBRL usage will still be on the side of external parties. When we want the

use of XBRL for all companies, a lot of cleansing needs to be done first. When that is settled, the

focus can shift towards the internal use of XBRL. And in the end, that is where the added value of

XBRL lies.

There are still actions that have to be taken by the software suppliers and accounting packages.

Trainings need also be developed.

But first there has to be a turning point. And when the right people are informed, and external

reporting in XBRL is settled, the next step will be using XBRL for internal processes.

K.B. Khargi 275859 18 May 2011 88


The future of XBRL is bright. It will be there, because in some foreign countries it is already

required and companies on the stock market have to report in XBRL.

The market is evolving and there will be fusions of software companies. In the end there will be

a number of them left. It will also be good for the international concurrence position for The

Netherlands, if they stay in the race. The fear of the intermediaries is that they will be taken

over.

Most probable, in 2013 reporting in XBRL will be regulatory obliged. Then higher numbers will

be reached. And when GL will be included in the SBR program, continuous auditing will also be

possible.

On the long run XBRL will become a natural thing.

The steps towards such a situation have to be in the right order:

1. Theory: a concept has to be well defined.

2. Practice: solving problems with software, people understanding the concept

When there are some cases of successful implementation, the market will move towards

adoption

For the SME eventually the use of XBRL (FR) will increase, when the commitment of the

government will be clear and the hurdles with the intermediaries will be taken away.

The large firms will be interested in GL and continuous auditing when their focus will be on

insights in control .In 2013 even with partial regulations we will be one step closer.

Concluding

All of the interviewees independently stated that this research was conducted three years too

early. They expect that when reporting in XBRL will be regulated and required by law, and when

that goes smoothly, the focus of the companies will shift towards the benefits of XBRL for their

internal processes.

K.B. Khargi 275859 18 May 2011 89


8 Conclusion

This is the final chapter of this thesis. The results or main findings of the study are displayed

beneath. Some research limitations are presented. Also recommendations and lessons learnt are

included in this chapter.

8.1 Main FindingsHere the main findings with regard to the aspects of the theoretical model are presented. These

findings are results of the analysis of the interviews that have been held for this study and

answer the research question.

Although from literature it seems that XBRL is already used for internal purpose, in practice this

is not the case in The Netherlands.

Reluctance of firms

There are various reasons why XBRL is not used by companies for their internal processes.

These reasons were not found in literature, but the experts that were interviewed mentioned

that the focus is now on external reporting and doing that right for the demanding parties.

There is no party that supervises XBRL for internal use. Companies still wait for more academic

research. Large companies that use ERP systems there is no urge to shift to XBRL; the data is

already standardized and they are able to report in XBRL. Preparing for such a project takes a

lot of effort and time with the cleansing of databases.

First a change in perspective of the way we look at accounting is needed.

Benefits

There are many benefits for the use of XBRL mentioned in literature. These benefits are mostly

about what XBRL can enable in theory; improving data analysis because of the ability to track

data, better risk assessment, accelerated implementation of continuous auditing, improved

internal controls, and reducing spreadsheet proliferation. In practice this is not found in The

Netherlands, because XBRL is only used for external reporting. Other reason, that was not stated

K.B. Khargi 275859 18 May 2011 90

What is needed in order to shift XBRL towards the front of the business reporting supply

chain for the purpose of continuous auditing in The Netherlands?


in literature, but mentioned by the interviewees are the relative low cost, and the automation of

back office processes, because of aging of the employees.

Conditions

Conditions before XBRL could be applied in a continuous auditing environment can be divided

in three categories; change in the general perspective of traditional accounting is required. For

companies there are steps to be taken in preparation of using XBRL for internal purposes.

Software suppliers should be more proactive and anticipate on the development and not wait

for the customers for their demands.

Successes and failures

With the SBR program The Netherlands succeeded in developing an approach that is domain

independent. Although the expected benefits are not yet reached, there are no projects that

failed. But all projects so far regarded XBRL for external reporting.

Continuous auditing

As was found in literature and confirmed by the interviewees, continuous auditing software

does not use XBRL and XBRL is not used for continuous auditing processes.

There are cases know (Siemens, IBM) where continuous auditing is successfully implemented.

In these cases XBRL is not used for this process. Continuous auditing therefore can be

implemented successfully without XBRL. In itself XBRL can be used without continuous

auditing. But both literature as well as the people interviewed agreed that the added value of

XBRL lies in the internal use.

Adoption

The multi domain approach in The Netherlands with the SBR program initially seemed to cause

a lagging position regarding the use of XBRL. But now the benefits for harmonization and

standardization are becoming visible.

Current situation

With the SBR program in The Netherlands with the bolt-on approach, the focus is still on the

rear end of the business reporting supply chain, and XBRL is used for external reporting only.

Most often this is done with a “save as” method.

Future

K.B. Khargi 275859 18 May 2011 91


All of the interviewees independently stated that this research was conducted three years too

early. They expect that when reporting in XBRL will be regulated and required by law, and when

that goes smoothly, the focus of the companies will shift towards the benefits of XBRL for their

internal processes.

8.2 Research Limitations

Because of the lack of implementation of XBRL for internal use in The Netherlands, case studies

were used to fill this gap. These projects may not be representative for the situation in The

Netherlands for most firms.

Another limitation could be that companies already use XBRL for internal purposes, but they

have not published about this. XBLR FR is for open, external communication and therefore not a

competitive issue. XBRL GL is for internal use, and for the reason of operational sensitivity, it is

a competitive issues and could be companies reluctant about publishing about their pilots with

GL. But if this was the case, the experts interviewed for this research would have known this

and could have mentioned this project, but anonymously.

The people interviewed for this research are all advocates of XBRL. There was nobody

interviewed that was against XBRL. This could result in conclusions that are biased. On the

other hand, even in literature there are no arguments found against XBRL Everybody believes in

the possibilities of XBRL.

8.3 Recommendations for further research

A lot of future research could be conducted on the topic of XBRL and continuous auditing. The

interviewees themselves have noted that the market is waiting for more scientific research.

One question that rose during this study was why CA software does not use XBRL and vice

versa. In many papers about continuous auditing is said that XBRL will enable it. And also in

literature about XBRL is mentioned that it can be used for CA, from the early days of the

development of XBRL. So why have these two concepts not integrated yet?

Another topic for future research could be how to get companies ready to use XBRL for internal

purposes. The results of this study only answer the question what is needed for the shift in

K.B. Khargi 275859 18 May 2011 92


general. One could go deeper into the matter and research what is needed to convince firms and

let them see the added value of XBRL from the very start of their processes.

8.4 Lessons Learnt

While conducting this research a lesson learnt was that people can copy each other’s words for

a decade long without adding anything new. This also refers to what was mentioned in the

previous section; in many papers about continuous auditing is said that XBRL will enable it. It

was written in papers from 2001 and the same was said in paper of 2009. Everyone is

enthusiastic about the possibilities of XBRL, but the wheel turns slower than was expected.

K.B. Khargi 275859 18 May 2011 93


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WebsitesChapter 1 Introductionhttp://bimehq.com/business-intelligence/gartners-hype-cycle-2009-saas-business-intelligence-rise/ http://www.xbrl.org http://www.xbrl-nederland.nl/ http://www.sbr-nl.nl/

Chapter 2 XBRLhttp://linkupima.com/groups/7eab42efae/summaryhttp://www.slideshare.net/pmadziar/fee-xbrl-webcast.piotr-february-17-2009http://www.belastingdienst.nl/zakelijk/softwareontwikkeling/softwareontwikkeling-10.htmlhttp://www.semansys.com/sdnn/Home/tabid/154/Default.aspxhttp://www.prophix.com/news/xbrl-financial-reporting-semansys.htmlhttp://www.fujitsu.com/global/services/software/interstage/solutions/xbrl/xbrl-solution-auditor.htmlhttp://www.softwarepakket.nl/index.php?http://www.softwarepakket.nl/cmm/swp/raadplegen_paksrt.php?pksrt=163&ckl=%&cmi=%&cgr=%&cin=%&lk=%&sa=%&cbp=%http://www.caseware.com/about-us/news-reviews/caseware-idea-inc.-participates-in-the-10th-xbrlhttp://www.approva.net/solutions/continuousaudit/http://www.softwarepakket.nl/index.php?http://www.softwarepakketten.nl/cmm/swp/raadpleeg_pakket_uitgebreid.php?vn=Managementrap.%20(EIS,DSS,MIS,%20jaarrek)&cbp=%&ckl=%&cmi=%&cgr=%&cin=%&lk=%&sa=%&zm=P&pksrt=46&id=3683

Chapter 4http://hitachidatainteractive.com/2008/05/19/how-continuous-auditing-and-xbrl-gl-work-together-to-provide-improved-business-value/ Chapter 5http://www.sbr-nl.nl/wps/wcm/connect/sbr-nl/sbr-nl/nl/SBR/SBR+Aanpak/http://www.accountview.nl/av55870.htm

http://www.accountview.nl/av55874.htmhttp://accountancyinnovatie.blogspot.com/2009/06/xbrl-sbr-mijn-visie.html

Chapter 6Wacaol Case study:http://www.xbrl.org/nmpxbrl.aspx?id=90Basic Life Case study:http://www.xbrl.org/nmpxbrl.aspx?id=93MIX Case study:http://www.microcapital.org/microcapital-brief-xbrl-international-publishes-case-study-from-the-microfinance-information-exchange-mix/http://www.xbrl.org/CaseStudies/

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http://www.accountview.nl/av55874.htm

http://www.accountview.nl/av55870.htm

http://www.sbr-nl.nl/wps/wcm/connect/sbr-nl/sbr-nl/nl/SBR/SBR+Aanpak/

http://hitachidatainteractive.com/2008/05/19/how-continuous-auditing-and-xbrl-gl-work-together-to-provide-improved-business-value/

http://hitachidatainteractive.com/2008/05/19/how-continuous-auditing-and-xbrl-gl-work-together-to-provide-improved-business-value/

http://www.softwarepakket.nl/index.php?http://www.softwarepakketten.nl/cmm/swp/raadpleeg_pakket_uitgebreid.php?vn=Managementrap.%20(EIS,DSS,MIS,%20jaarrek)&cbp=%25&ckl=%25&cmi=%25&cgr=%25&cin=%25&lk=%25&sa=%25&zm=P&pksrt=46&id=3683



http://www.approva.net/solutions/continuousaudit/

http://www.caseware.com/about-us/news-reviews/caseware-idea-inc.-participates-in-the-10th-xbrl

http://www.softwarepakket.nl/index.php?http://www.softwarepakket.nl/cmm/swp/raadplegen_paksrt.php?pksrt=163&ckl=%25&cmi=%25&cgr=%25&cin=%25&lk=%25&sa=%25&cbp=%25

http://www.softwarepakket.nl/index.php?http://www.softwarepakket.nl/cmm/swp/raadplegen_paksrt.php?pksrt=163&ckl=%25&cmi=%25&cgr=%25&cin=%25&lk=%25&sa=%25&cbp=%25

http://www.fujitsu.com/global/services/software/interstage/solutions/xbrl/xbrl-solution-auditor.html

http://www.prophix.com/news/xbrl-financial-reporting-semansys.html

http://www.semansys.com/sdnn/Home/tabid/154/Default.aspx


http://www.slideshare.net/pmadziar/fee-xbrl-webcast.piotr-february-17-2009


http://www.sbr-nl.nl/

http://www.xbrl-nederland.nl/

http://www.xbrl.org/

http://bimehq.com/business-intelligence/gartners-hype-cycle-2009-saas-business-intelligence-rise/


Appendix: Questionnaire

AchtergrondOnderstaand schema geeft een overzicht van mijn scriptie. Verschillende blokken (of combinaties ervan) zijn uitgewerkt in de hoofdstukken. Mijn onderzoeksvraag heeft betrekking op het gebied in de cirkel. Dit is nauwelijks beschreven in de literatuur, wat betreft XBRL. Op het gebied van continuous auditing/ monitoring vind je wel meer. Veel mensen roepen dat XBRL de adoptie van continuous auditing zal versnellen. En slechts weinigen geven ook daadwerkelijk aan waarom en hoe dat dan zou moeten gebeuren. Hoe dat in de praktijk gaat, ben ik helemaal niet tegengekomen. Dus daarom dit onderzoek…

BackgroundThe picture presents an overview of my thesis. Different (combinations of) blocks are the subject in the several chapters.My research is captured by the part within the circle. This is hardly described in literature, for XBRL. With regard to continuous auditing/ monitoring more is found. A lot of authors state that XBRL will accelerate the adoption of continuous auditing. And only few present why and how that should be realized.I have not found, how that occurs in practice. That is the reason for this research…

Vrag en achtergrond / Questions Background 1. Wat is uw functie?

What is your position?2. Wat voor rol speelt XBRL in uw werk?

What is the role of XBRL in your daily activities?

K.B. Khargi 275859 18 May 2011 97

Process 1

Process 2

Process 3

Process 4

Process …

General

Ledger:

Several

Journal

Entries

Continuous Auditing

Annual account,

Management

Reports,

Etc.



Vragen XBRL /Questions XBRL 3. Waar en hoe wordt XBRL intern ingezet (linkerkant van schema)? XBRL-GL of iets

anders? Indien de focus op de rechterkant van het schema ligt, wat is de reden hiervan? Kosten, barrières, regelgeving? Where and how is XBRL used internally (left side of the scheme)? XBRL-GL or something else? If the focus is only on the right sight, what is the reason? Costs, barriers, regulations?

4. Wat zijn de redenen voor een bedrijf om XBRL te implementeren?Speelt het “in control” zijn ook een rol hierbij? Dit is immers voor bedrijven die continuous auditing toepassen de belangrijkste reden.What are reasons to implement XBRL for a firm? Is “being in control” considered? For companies that have applied continuous auditing was this the main reason. (previous research K.B.Khargi 2010)

5. Zijn er voorwaarden om XBRL te implementeren? Welke?Are there conditions to implement XBRL? Which are there?

6. Wat zijn de succesfactoren en knelpunten bij XBRL implementatie? Kunt u voorbeelden noemen van succesvolle of juist mislukte projecten?What are success factors and pitfalls with XBRL implementations? Could name examples of such projects?

7. Zijn er bij het gebruik van SBR al cijfers van de resultaten bekend? Are there with the use of SBR already results known?

8. Welke XBRL tools worden er gebruikt? Zijn deze voor intern of extern gebruik?Which XBRL tools are used? Are these used for internal or external purpose?

Vragen XBRL en CA / Questions XBRL and CA 9.10.11.12.13.14.15.16.17. Worden de tools van vraag 8 ook ingezet voor continuous auditing doeleinden?

Are tools from question 8 also used for continuous auditing purposes?18. Zijn er voor een bedrijf bij de stap naar continuous auditing voorwaarden betreffende

het gebruik van XBRL? Welke?Are there conditions for a firm with the step to CA regarding the use of XBRL? Which?

Vragen afsluitend / Finishing Questions19. Waarom gaat XBRL adoptie sneller in landen als België, Korea, Japan?

Why is the adoption of XBRL faster in countries such as Belgium, Korea, Japan?20. Hoe is de situatie nu betreffende XBRL implementaties in Nederland?

Valt alles onder SBR binnen Nederland? Is er sprake van een push- (vanuit regelgeving/ accountants) of pull-(vraag, vanuit bedrijven) situatie? Of een combinatie? Hoe wordt XBRL “verkocht”?

K.B. Khargi 275859 18 May 2011 98


How is the current situation regarding XBRL implementations in The Netherlands?Is all done within the SBR program? Is there a push (from regulations/ accountants) of a pull (demand from the firms) situation? Or a combination of those? How is XBRL “sold”?

21. Hoe ziet u de toekomst van XBRL in Nederland?How do you see the future of XBRL in The Netherlands?

K.B. Khargi 275859 18 May 2011 99