accounting inside xbrl december 2011

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What Every Accountant Can Learn from XBRL

Neal J. Hannon, CMA (inactive)University of Kansas

Department of Accounting & Information SystemsFlorida Institute of CPA’s

December 2011

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Speaker

Neal Hannon, CMA (inactive)

Lecturer, Accounting & Information Systems at

University of Kansas Member of XBRL-US since 2000 Many XBRL articles, speeches, panels, and presentations Consultant to Fujitsu, IBM, Webfilings, Altova, Rivet, EDGAR Online, XBRL Cloud, Financial Accounting Foundation, FASB and others

The Franciscan Roots of Modern Accounting

 First surviving accounting textbook:       “The Summa” written by Fra. Luca Pacioli in 1494       (included illustrations by L. Da Vinci)

A best seller in its dayPublicized the Method of VeniceHelped to spread literacy in the middle class

Luca Pacioli—the “Father of Accounting”

A mathematician and merchantBecame a Franciscan friarFranciscans came out of, and ministered to, merchant classDid not invent double-entry accounting but spread the knowledge

The Method of Venice(Double-entry Accounting) A binary (0,1) method for recording economic eventsInvention of the “Debit” and “Credit” concepts from the Italian terminologyAllowed for much easier addition and subtraction before calculators were invented 

DebitComes from the Italian “debito”which comes from the Latin “debita” and “debeo”which means:       OWED TO the proprietor       or an asset of the proprietor  CreditComes from the Italian “credito”which comes from the Latin “credo”which means:

Trust or belief (in the proprietor)    or OWED BY the proprietor  

From the 13th century to the present:Double-entry accounting spread throughout the worldAccountants in each country adapted accounting practices

to suit their:CulturesLaws & regulationsCapital market structuresEnvironments

National differences in accounting rules and practices render financial statements of companies based in different countries UNCOMPARABLE

Securities Act of 1933

Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives: require that investors receive financial and other

significant information concerning securities being offered for public sale; and

prohibit deceit, misrepresentations, and other fraud in the sale of securities.

Securities Exchange Act of 1934

With this Act, Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self regulatory organizations (SROs).

Sarbanes-Oxley Act of 2002 On July 30, 2002, President Bush signed into law the

Sarbanes-Oxley Act of 2002, which he characterized as "the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt." (the 1930’s)

The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures, combat corporate and accounting fraud

Created the "Public Company Accounting Oversight Board," also known as the PCAOB, to oversee the activities of the auditing profession.

XBRL Committee Encouraged by SEC Chairman Arthur Levitt's Recommendation That It be Expanded and Used by Investors and CompaniesBusiness Wire,  Oct 30, 2000  Business EditorsNEW YORK--(BUSINESS WIRE)--Oct. 30, 2000In remarks last week, Arthur Levitt, Chairman of the Securities Exchange Commission (SEC), acknowledged XBRL and recommended its further development to turn financial statements into meaningful information for investors using this new revolutionary technology. Chairman Levitt's remarks were made at the American Institute of Certified Public Accountants' (AICPA) Fall Council Meeting in Las Vegas, Nevada on October 24, 2000.

First SEC Mention of XBRL

Former Chief Accountant Lynn Turner:

“I support XBRL. I wrote the comment for chairman Levitt’s speech. But please tell

everyone you talk to about XBRL that you must

Get the Accounting Right!”

AccountingGoes Digital

Do You Remember Vinyl Records?

Had to Play from start to finish

Record could be damaged if you attemptedto play a specific track.

Similarly , Financial statements, notes and disclosures today are meant to be read and understood as a whole. Audit opinions are given on the entire set of financials. The paper-based, report centric world lives on.

Vinyl Records And Disclosures

The technology dramatically changed how we relate to musicand gave us more power to select individual cuts suited tomusical tastes and preferences

Then Came Digital Music

• Individual Tracks Separated• Choose Your Own Order for Play• Start and Stop

What can digital data do?

George Martin and the Beatles

The task Collect, identify, classify the entire set of music created

by the Beatles Using master tapes, break out the riffs Re-configure music into digital sound bytes

The results New Music.. The Beatles Love Album

George Martin and the Beatles

The task Collect, identify, classify the entire set of music created

by the Beatles Using master tapes, break out the riffs Re-configure music into digital sound bytes

The results New Music.. The Beatles Love Album

The SEC and Interactive Data

The task Collect, identify, classify the entire set of GAAP created

by US Authoritative Sources of GAAP Using financial statement hierarchy, break out the

elements into an XBRL taxonomy Re-configure accounting into digital bytes

The results New Filings.. The SEC Interactive Data initiative in

XBRL

Digital data fundamentally

changes

the paper-based

reporting paradigm

Who is using XBRL ?

• Federal Deposit Insurance Corporation (FDIC) went live with its XBRL system in 2005, and has since reduced errors from 18,000 to zero, with an estimated savings of $26 million over the next ten years.

• The Dutch Government went live in 2007 and expects to save $345 million annually as a result of implementing XBRL.

• The Australian Tax Office is implementing XBRL and expects to save $780 million (Australian) per year.

XBRL

Not just for the SEC

External

Financial

Reporting

BusinessOperations

Internal

Financial

Reporting

Investment,

Lending,Regulati

on

ProcessesEconomic Policyma

king

Participants

AuditorsTradingPartners

Investors

FinancialPublishersand Data

Aggregators

Regulators

Software Vendors

ManagementAccountants

Companies CentralBanks

XBRLXBRLXBRLXBRL XBRLXBRLXBRLXBRL

XBRL for G/LJournal Entry

Reporting

XBRL for Financial Statements

Scope and Role of XBRL

Who is using XBRL ?

Kim Wallin, Controller, State of Nevada

In 2007, Wallin begin considering XBRL as a solution to grant reporting, and when the Department of Agriculture asked for help with their reporting, Deloitte was brought in and two of Agriculture's grants were selected for the XBRL pilot.

"The goals were timely and accurate data,“ said Wallin, "stronger internal controls, reduced costs, a standardized system of seamless data exchange, business processes

and data elements. XBRL met all of those goals."

XBRL Does NOT

Change management’s accounting decisions. Require either more or less disclosure than

companies are currently experiencing Restrict companies to using elements in the

taxonomy (data dictionary) only.

Have you ever wondered which specific US GAAP authoritative literature stands behind each item onyour company’s SEC disclosures?

A US GAAP XBRL Taxonomy has the answer

Ever wonder how accounting experts mightdefine each key item on your SEC 10K?

A US GAAP XBRL Taxonomy has the answer

XBRL BASICS

Accountants: Industry experts have developed a data dictionary, or taxonomy that covers US GAAP reporting requirements to the SEC

The taxonomy will has labels, definitions, and references to authoritative literature organized in a reporting hierarchy in addition to computer codes in XBRL.

US GAAP TaxonomyDevelopment Effort

FAF, XBRL US

GAAP,SEC Regulations

Codification projectAudit check lists

Internal and publictesting

XBRLprotocols

TaxonomyRelease

CFOInvestor Relations

CurrentReporting Practice

Key concept:Create a Data model

AnalystsInvestors

XBRL

The Accounting’s Inside

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Standard Label

Standard label in English:Revenue Recognition Accounting Policy, Gross and Net Revenue Disclosure

Standard label in XBRL:RevenueRecognitionAccountingPolicyGrossNetRevenueDisclosure

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Definition

Description of accounting policies associated with the recognition of gross revenues and gross revenue adjustments, which are components of net revenues in the statement of operations for the period.

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Authoritative Reference

Accounting Principles Board Opinions (APB)Number 22, Paragraph 8

Will the Meta Data Count?

So.. If a filing contains a label that is further described by a definition and a reference, the computer referencing the item will have all three pieces of information as discoverable meta data

Label Definition Reference

If the definition is off or the reference is wrong, is the tagged data also wrong? What if an investor, reading the XBRL meta data, relies on the XBRL definition or reference? Shouldn’t the entire financial information supply chain care about the triad of accounting?

Will the Meta Data Count?

XML is a wonderful language for describing objects in computer readable formats. XML depends on meta data to describe the contents of its digital message.

XBRL must contain several attributes in order to transform numbers into meaningful business reporting interactive data.

When we move from a paper based reporting world to an interactive data world, the data contained in a finding will not be complete or understandable without accurate meta data accompanying the element reported.

Principles

GAAP accommodates variation in applied accounting methods as long as the methods generally conform to GAAP’s set of principles…..

This drives computers crazy!

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Basic XML Concepts & Terminology

Anatomy of XML element

<CostOfGoodsSold>101000000</CostOfGoodsSold >

Starting tag = <CostOfGoodsSold> Ending tag = </CostOfGoodsSold> Element name or element-type = CostOfGoodsSold

[no spaces and case sensitive] Element content = 101000000

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Basic XML Concepts & Terminology

Need for attributes What are the problems with the following

elements? <price>34.50</price> <receipt_date>05/04/2008</receipt_date>

Adding attributes<price currency=“USD”>34.50</price><receipt_date date=“ISO 8601”>2008-05-04</receipt_date>

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A Remaining Problem (Implied vs. explicit)

Company Property, Plant and Equipment

Sales Cost of Goods Sold

Staples Total property and equipment

Sales Cost of goods sold and occupancy costs

ExxonMobil Property, plant, and equipment, at cost, less accumulated depreciation and depletion

Total revenue and other income

Crude oil and product purchases

Intel Property, plant and equipment, net

Net revenue Cost of sales

Amazon.com Fixed assets, net Net sales Cost of sales

IBM Plant, rental machines and other property

Total revenue Total cost

Wal-Mart Property and equipment, net Net sales Cost of sales

Source: company annual reports

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Where XBRLComes In

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Some XBRL Terms

2008 2007

Sales $ 145 $ 132

Cost of Goods Sold 101 92

Gross Profit 44 40

Sales, general, and administrative

10 8

Net Income $ 34 $ 32

GrayCoIncome Statement

Year ended Dec 31, 2008(millions)

Label

Context

Attribute

Value

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What XBRL is based on ..

XML Specifications

XBRL Specification

Taxonomy

Instance Document

BuildsModules

Bind toDomain

Builds

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THE XBRL Specification 2.1

The XBRL Specification provides the fundamental technical definition of how XBRL works. 

The spec defines XML elements and attributes that can be used to express information used in the creation, exchange, and comparison tasks of business reporting.

XBRL consists of a core language of XML elements and attributes used in XBRL instances as well as a language used to define new elements and taxonomies of elements referred to in XBRL instances, and to express constraints among the contents of elements in those XBRL instances.

Only one specification for the whole world

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Taxonomies

• A Taxonomy is a dictionary of financial reporting terms or concepts

• The concepts captured in a taxonomy are referred to as ELEMENTS. These Elements form the core of XBRL.

• Separate Taxonomies are developed for different reporting purposes such as US GAAP, IFRS, bank regulatory reporting. etc

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Anatomy of an XBRL Element

XBRLElementXBRL

ElementFinancial

Reporting ConceptFinancial

Reporting Concept

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Anatomy of an XBRL Element

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Anatomy of an XBRL Element

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COUNTRY / JURISDICTION TAXONOMY LEVEL STATUS

Canada GAAP Primary Financial Statements Ack Draft

  Notes to Financial Statements Ack Draft

China China Listed Company Taxonomy Framework Ack Draft

  China Fund Company Taxonomy Framework Ack Draft

  China Financial Listed Company Information Disclosure Taxonomy Ack Draft

IASB IFRS General Purpose, 2005 rules Ack Final

  IFRS General Purpose, 2004 rules Ack Final

  IFRS General Purpose, 2003 rules Ack Draft

International Global Common Data Taxonomies Ack Draft

Ireland GAAP Commercial and Industrial Ack Draft

Israel Israeli Annual and Periodic Reports General Purpose Financial Reporting, extension for International Financial Reporting Standards (IL-IFRS-GP)

Ack Draft

Japan EDINET Taxonomy Ack Final

Korea GAAP Primary Financial Statements Ack Draft

New Zealand  GAAP Commercial and Industrial Ack Draft

Spain General Data Idenfication Ack Final

Thailand Listed Companies - Banking Services Ack Draft

  Listed Companies - Commercial and Industrial Ack Draft

  Listed Companies - Securities Companies Ack Draft

United Kingdom GAAP Commercial and Industrial Ack Draft

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COUNTRY / JURISDICTION TAXONOMY LEVEL STATUS

United States GAAP - Investment Management  App Final

  XBRL US  Accountants' Report Taxonomy 1.0 Ack Final

  XBRL US Country Taxonomy 1.0  Ack Final

  XBRL US Currency Taxonomy 1.0  Ack Final

  XBRL US Document and Entity Information Taxonomy 1.0  Ack Final

  XBRL US Exchange Taxonomy 1.0 Ack Final

  XBRL US GAAP Taxonomy 1.0  Ack Final

  XBRL US  Management's Discussion and Analysis Taxonomy 1.0  Ack Final

  XBRL US Management Report Taxonomy 1.0  Ack Final

  XBRL US  North American Industrial Classification System (NAICS) Taxonomy 1.0 

Ack Final

  XBRL US SEC Certification Taxonomy 1.0  Ack Final

  XBRL US Standardized Industrial Classification (SIC) Taxonomy 1.0  Ack Final

  XBRL US State-Province Taxonomy 1.0  Ack Final

  GAAP - Commercial and Industrial (superseded by the 2008 version) App Final

  GAAP - Banking and Savings (superseded by the 2008 version) App Final

  GAAP - Insurance (superseded by the 2008 version) App Final

  GAAP - Brokers and Dealers (superseded by the 2008 version) Ack Draft

  GAAP - Pensions (superseded by the 2008 version) Ack Draft

     SEC Certification (superseded by the 2008 version) App Final

  Management Report (superseded by the 2008 version) App Final

  Accountants Report (superseded by the 2008 version) App Final

  MD&A (superseded by the 2008 version) App Final

  ICI Mutual Fund Risk/Return Summary Taxonomy Ack Final

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Extension Taxonomies

Why you might need an extension taxonomy1. You want to include a financial statements item not in

the standard taxonomy you are using.

2. Changing a label for a standard base taxonomy to match your label name

3. Changing the presentation structure of one or more standard base taxonomy elements to match the presentation structure of your report.

4. Changing the calculation structure of one or more standard base taxonomy elements to match the calculation structure of your report.

US GAAPPrimaryTerms

US GAAPFS

Terms

Taxonomies and Extensions can be thought of as the building blocks for XBRL reporting

US GAAPBank Terms

First Raleigh BankTerms

Foundation Terms

Industry Terms

Company Specific Terms

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XBRL Linkbases

Definition linkbase: Indicates for each concept whether it is a special case of some other defined concept.

Calculation linkbase: Indicates how one concept in a group of “sibling” concepts is related to the value of their parent concept.

Presentation linkbase: Indicates the order in which each concept should be presented when grouped with its siblings.

Label linkbase: Associates each concept with one or more presentation labels, one per language.

Reference linkbase: Associates each concept with one or more places in authoritative literature where the concept is defined.

Dimension linkbase: Captures detailed information about the horizontal and vertical axes of a table in a note to the financial statements.

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Instance Documents

• An Instance Document is your XBRL financial report

• Instance Documents will include:

• Values (ex. numbers, blocks of text etc)

• Tags to identify the values

• Taxonomy references – Telling you where the tags are defined

• Context – Information describing the reporting entity and period

• Units/Measure – Information on unit of measure, currency etc.

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XBRL TaxonomyCreated by XBRL Consortium

Consumed

Rendered

XB

RL

Cre

ati

on

XBRL DocumentCreated by Preparer

Company Financial Statement

TAGGING

AT 101 Assurance

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Software Used

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Six Steps to XBRL , Journal of Accountancy, Feb. 2008

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XBRL: A World-Wide Phenomenon

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Services architecture leveraging taxonomies

Transaction and or subsidiary

Data

Senior Management

Viewing and aggregation for department & management

XBRLWeb

Services

Controls

Controls

Controls

Controls

Controls

Controls

‘Wrap & Map’ACORDXBRL GL

ACORDXBRL GL

ACORDXBRL GL

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System 3System 1

Identificador de la Cuenta

Descripción Principal de la Cuenta

Monto Monetario

Fecha de Asignación/Ingreso

Account Number

Account Description

Entry Amount

Posting Date

Account#

Description

Amount

PostDate

System 2

accountMainID

accountMainDescription

amount

postingDate

accountMainID

accountMainDescription

amount

postingDate

accountMainID

accountMainDescription

amount

postingDate

XBRL GL XBRL GLXBRL GL

The Answer - XBRL GL

Putting it all together:What are the opportunities for CPAs?

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Providing XBRL services: Still many unknowns/questions/issues!

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Introduction to Opportunities

Advisory Services Assurance Services Agreed-upon Procedures Examination of an Assertion About XBRL-Tagged

Data Examination of Controls Over the Preparation of

the XBRL-Tagged Data AT Section 601, Compliance Attestation Review of an Assertion About XBRL-Tagged Data

Center for Audit Quality [Alert #2009-55]

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Advisory Services

Assisting management in obtaining an understanding of XBRL, relevant requirements, implementation processes, and timetable

Providing observations and recommendations to management on its XBRL project management plan, implementation process or supporting documentation prepared by the client XBRL team members? Outsourcing (filing agent)? Software selection? Timeline?

Providing comments on the client’s mapping of its financial statements to the XBRL US GAAP Taxonomy

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Preparing XBRL Documents for External Reporting

Recommend fire drill to client(s) to work out issues before filing is required: Allocation of work between client, CPA, and 3rd parties Degree of changes to face of financial statements to

match standard taxonomy [could be zero] Decide on block vs. detailed footnotes Develop/implement/test/modify extension taxonomies

Develop plan for official filing based on fire drill results

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Advisory Services: Warning…

Avoid for audit clients… Performing project management of the XBRL

implementation project; Selecting or recommending a specific software product

for the client to use; Mapping the client’s financial statements to the

XBRL US GAAP Taxonomy; Designing a plan for the client to implement, or

designing controls over that process; Preparing a prototype of the client’s financial

statements using XBRL; Providing ongoing support to management in tagging

financial statements.

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Assurance

Independent auditor not required to have any role in XBRL exhibits in SEC filings.

The following standards do NOT apply: AU 550--Other Information in Documents Containing

Audited Financial Statements, AU 722--Interim Financial Information AU 711--Filings under Federal Securities Statutes

However, the client may request the audit firm perform procedures or report on the XBRL instance document…

Assurance Services

Key components of audit/attestation/assurance engagement… Subject matter Client assertions about subject matter Criteria Attestation of client’s assertions about subject matter in

compliance with criteria

Paper financial statements vs. XBRL What are the subject matters, assertions, criteria, and

attestations? Are they the same of different? (Yes, no, maybe!)

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Assurance Issues

Paper financial statements not same as XBRL instance document (different subject matter/criteria)

Current audit opinion focuses on document level (fair view)

XBRL document is a dataset, presentation via a style sheet, so no fair view? XBRL needs assurance on data-level

No taxonomy for the audit opinion or guidance how to connect the opinion to an instance document, could be the FS

No guidance yet about signing audit opinions and validations of the signature

No audit tools (as opposed to validation tools) available for analyzing instance documents

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Preparation & Assurance Questions1

Was the appropriate standard taxonomy chosen based on the industry and applicable GAAP?

Was the extension taxonomy properly created for new concepts and relationships not included in the standard taxonomy. Some related questions include:

Was a tag included in the extension taxonomy that already existed in the applicable standard taxonomy?

Are the customizations of labels, presentation order, and calculations, as captured in applicable linkbases, appropriate?

1List inspired by Eric Cohen CICA presentation, 2004

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Preparation & Assurance Questions

Is everything tagged that should be tagged? Was the most appropriate XBRL tag chosen for

each fact or concept in the source document? Two general types of errors could occur here:

Judgment error Mechanical error

Were there tags in the standard taxonomy that would have been expected to be used, but were not used?

Are contexts consistent and appropriate?

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Audit Approach (AICPA)

“Attest Engagements on Financial Information Included in XBRL Instance Documents” (AT 9101.47–.54)

.52 …practitioner should consider performing include: • Compare the rendered Instance Document to the financial

information. • Trace and agree the Instance Document's tagged information to the

financial information. • Test that the financial information is appropriately tagged and included

in the Instance Document. • Test for consistency of tagging (for example, an entity may use one

taxonomy tag for one year and then switch to a different tag for the same financial information the following year. In this case, the financial information for both years should use the same tag).

• Test that the entity extension or custom taxonomy meets the XBRL International Technical Specification (for example, through the use of a validation tool). 

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PCAOB Guidelines (2005!)

PCAOB published 11-page staff Q&A regarding XBRL on May 25, 2005.

A3. An auditor may be engaged to examine and report on whether the XBRL-Related Documents accurately reflect the information in the corresponding part of the official EDGAR filings… under AT section 101, Attest Engagements, as amended.

A4…the auditor must have sufficient knowledge of the applicable SEC Regulations, EDGAR Filer Manual requirements, and XBRL taxonomies and specifications to perform the examination.

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PCAOB Guidelines

Q5. What criteria…? A5. US GAAP Version 2.1…suitable criteria [however]

Company extensions of those taxonomies normally do not go through the same development processes as [standard taxonomies]. Accordingly, the auditor should evaluate whether company extensions represent suitable and available criteria as described in AT section 101.

Agreed-Upon Procedures

Firm’s report identifies proceduresperformed and results.

Report does not express an opinionand makes no representations regarding the sufficiency of the firm’s procedures.

Report is restricted to the client and the named parties who have agreed to the procedures & accepted responsibility for the sufficiency for their purposes.

It is not appropriate for companies to refer to services in a publicly available document

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Examination of an Assertion about XBRL-Tagged Data

SEC Rules note that issuers can obtain third-party assurance under the PCAOB Interim Attestation Standards, AT section 101 AT 9101.47–.54 suggests rending, but this procedure alone

does not sufficiently address the risk that errors could exist in the tagged financial information.

Criteria: SEC Rules and the XBRL US GAAP Taxonomy Preparers Guide What about extension taxonomies? Are they subject matter

or criteria? What about highly-technical XBRL Specification 2.1? What

content? How do you decide? Skills? Specialist? How is materiality assessed? Document as a whole vs.

line-by-line?

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Examination of Controls Over the Preparation of XBRL-Tagged Data

Not likely to be a stand-alone service Probably conducted in conjunction with other XBRL

services Client’s focus is on just delivering an accurate & complete

XBRL document [controls and efficiency are secondary for now]

Because XBRL document creation is bolt-on (after-the-fact), tagging is typically not part of a company’s SOX 404 internal control over financial reporting [but that could change in the future]

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AT Section 601, Compliance Attestation

AT section 601 provides guidance on performing an examination or agreed-upon procedures engagement related to: An entity's compliance with the requirements of specified

laws, regulations, rules, contracts, or grants or The effectiveness of an entity's internal control over

compliance with specified requirements. SEC Rule 405 of Regulation S-T imposes certain content,

format, submission and posting requirements that an entity’s compliance could be evaluated against.

However, the EDGAR Filer Manual includes highly detailed, technical information; as such, audit firms should consider carefully whether they have the technical expertise to perform such compliance services.

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General Requirements under SEC Rule 405 Regulation S-T

Information in interactive data format should not be more or less than the information in the ASCII or HTML part of the report

Use of the most recent and appropriate list of tags released by XBRL U.S. or the IASCF as required by EDGAR Filer Manual.

Viewable interactive data as displayed through software available on the Commission’s Web site, and to the extent identical in all material respect to the corresponding portion of the traditional format filing

Data in the interactive data file submitted to SEC would be protected from liability for failure to comply with the proposed tagging and related requirements if the interactive data file either Met the requirements; or Failed to meet those requirements, but failure occurred despite

the issuer’s good faith and reasonable effort, and the issuer corrected the failure as soon as reasonably practical after becoming aware of it.

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Review of an Assertion about XBRL-Tagged Data

Generally consist of inquiries and analytical procedures designed to provide a moderate level of assurance (i.e., negative assurance).

However, probably could not perform meaningful analytical procedures on XBRL-tagged data sufficient to achieve even this level of assurance and it is uncertain what other procedures could be identified that, when combined with inquiries, could form the basis for a review engagement.

Accordingly, the feasibility of a review engagement related to XBRL tagging is uncertain. If a review engagement could be developed, it would be important for the review report to communicate its limitations to users.

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Management Assertions (SAS 106) & Related Audit Objectives

Assertions about account balances Existence Completeness Rights and Obligations Valuation or Allocation

Assertions about classes of transactions and events Occurrence Completeness Accuracy Cutoff Classification

Assertions about presentation and disclosure Occurrence and rights and obligations. Completeness Classification and understandability

Audit Objectives Validity Completeness Ownership Valuation Cut-off Classification Disclosure

Based on research of Srivastava & Kogan

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Risk Based Approach for Conceptualizing Assertions

Data Deficiencies in the XBRL Instance Document Omissions of relevant data from the traditional format

documents (Completeness) Insertions of data not present in the traditional format

documents (Existence) Erroneous element values and / or attribute values

(such as context, unit, etc.) (Accuracy: Element Accuracy or Attribute Accuracy)

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Risk Based Approach for Conceptualizing Assertions

Deficiencies of the Mark-up in the XBRL instance Document Erroneous tagging of data that violates XML syntax

rules (Violation of Well-formedness) Erroneous tagging of data that violates XML Schema

(Violation of Validity) Inappropriate choice of XBRL elements to tag

traditional format document data (Violation of Proper Representation)

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Risk Based Approach for Conceptualizing Assertions

Deficiencies of XBRL Taxonomies used by the Filer Improper choice of general and industry-specific XBRL

taxonomies by the filer (Proper Taxonomies) Violations of XML or XBRL language rules in XBRL

taxonomy extensions by the filer (Valid Taxonomy Extensions)

Inappropriate introduction of new elements in XBRL taxonomy extensions (Proper Extension Elements)

Inappropriate / erroneous linkbases in XBRL taxonomy extensions (including the choice of inappropriate/misleading labels) (Proper Linkbases)

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An Accounting Intro to XBRL

Accounting can be found in the taxonomy• Accounting structure is in the linkbases• Definitions are explicit, not implied• Authoritative literature is linked • Taxonomy elements are highly vetted

• FASB, SEC, Public reviews

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Tools for Accounting

• FASB’s XBRL Yeti Tool• SEC’s EDGAR site• SEC’s XBRL site• XBRL US site• XBRL Cloud EDGAR Dashboard• FASB’s Codification of US GAAP

• Proposed XBRL for New ASC’s• Smart Phone App BRIX

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US GAAP Taxonomy 2011

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Path to the Taxonomy's Accounting

• FASB.org; click on FASB XBRL• Click on “taxonomy view”, then

• ‘Entire 2011 US GAAP Financial Reporting Taxonomy’

• Once there, type “cash” into search box

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FASB’s XBRL

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Yeti – A Taxonomy Reader

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SEC’s Interactive Data Site

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XBRL US Site

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XBRL Cloud’s EDGAR DASHBOARD

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The Codification of US GAAP

US GAAP was contained in over 12 publications of official and semi-official GAAP prior to the 2005-7 effort to place all US GAAP into an electronic index called ACS.

Access to the ACS is either public or professional. Professional access is a paid service.

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Accounting Standards Codification

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SEC’s EDGAR System

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Starbucks

123

Starbucks

124

Starbucks

125

Starbucks

126

Starbucks

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XBRL US Smart Phone App

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Acknowledgements

Mike Willis and Eric Cohen, PwC

Charlie Hoffman, EDGAR Online

Yossef Newman, Deloitte

Walter Hamscher, Standard Advantage

Liv Watson, XBRL International

Jan Pasmooij, Royal NIVRA, Netherlands

Roger Debreceny, U. of Hawaii

Clinton “Skip” White, U. of Delaware

Raj Srivastava, U. of Kansas

Glen Gray, Cal State Northridge

Greg Zegarowski, Financial Leadership Corporation

Amy Pawlicki, AICPA

Paul Penler, E&Y

XBRL InternationalXBRL USCenter for Audit Quality

Apologies to anyone I missed.

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Questions?

Thank You

hannon@ku.edu