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  • CPAs and the Company Business Information Supply ChainMike WillisFounding Chairman, XBRL InternationalPartner, PricewaterhouseCoopers

  • Business TrendsDetroit Automobile Company, 1899Ford, 1903The impact:1908 12 to 14 hours to assemble$1000 price per car1914 93 minutes to assemble $360 price per car19291 in 5 Americans owned a car

  • Business Trends (cont.)1974Average Grocery Store had 9000 SKUsChewing gum sale in Ohio changed that foreverToday UPC implications$17B annual savings in grocery chain savings aloneAverage Store over 30,000 SKUs Greater controls over assortment, inventory levels and pricingScanning /self check out are routine

    We showed that it could be done on a massive scale, that cooperation without antitrust implications was possible for the common good, and that business didnt need the government to shove it in the right direction. Alan Haberman, Chairman, Symbol Standardization Subcommittee

  • Open Standards Discussion TopicsCompany ApplicationsOperational Use Risk & Credit AssessmentInternal ReportingExternal Reporting

  • The Corporate Reporting Supply ChainWhatACORDXBRLLedger XBRLFinancial Statements

  • The Corporate Reporting Supply ChainWhatACORD

  • Transaction DataMultiple Departmental Excel SpreadsheetsSenior ManagementConsolidated spreadsheets for managementEmail & File ServersManagement Reporting Current Architecture2000 elements=6500 spreadsheets (this is not a typo)

  • Transaction DataMultiple Departmental Excel SpreadsheetsSenior ManagementConsolidated spreadsheets for managementEmail & File ServersManagement Reporting Current Architecture

  • Subsidiary ERPsSenior ManagementInternal ReportingSupplemental information aggregation

  • Transaction and or subsidiary DataSenior ManagementViewing and aggregation for department & managementWeb Services ArchitectureWeb ServicesSchema

  • Visibility of Information The first obstacle is.?

    Language

    XBRL can help to increase the consumers access to information in their own language regardless of what language the report is published in.

    Lets find the amount for financial income

  • Once you have virtual access to the underlying detail data; then you can begin to access it.

    Management can access

    Board members can access it

    Others???

    How they access it is also part of their ability to analyze it?

  • Visualization A better way of analyzing information todayMost information today is in columns of numbers

  • Visualization A better way of analyzing information todayIdentified business drivers that contribute to a company-defined outcome (EVA, ROCE etc) can be mapped out; Performance in each of those drivers can be colour coded Management are provided with a clear view of what caused a given outcome and the scale of their impact.Includes organisation charts that reflect financial performance;Favourable performance shown in blue (and adverse performance shown in red);Enables an immediate top-down view of business unit performance throughout the global company.Business templates: to portray financial/non-financial information

  • Visualization A better way of analyzing information todayMonthly financial data can be compared against either budget and/or against previous year to get idea of under/over performance; The data can then be smoothed into a Moving Annual Average to clarify the underlying trend of the variableThe standard deviation of any financial variable may be calculated for every business unit in group;Business units with a high standard deviation for a given financial variable (i.e. > 2) can be immediately identified and ranked in order;The analysis provides an immediate way of identifying unusual performance amongst a large group of business units.Statistical analyses: to identify trends and outliers

  • Visualization A better way of analyzing information todayPossible end-of-year sales, profit .etc outcomes can be calculated on the basis of a number of forecast scenarios;The average of these scenarios can then calculated and assessed against management forecasts;Enables an immediate identification of over optimistic forecasts and the possibility of profits warnings.Variables can be plotted against one another to determine their respective influence on a given outcome;In the above example, gross profit margin is shown against sales for FY2002 and actual outcomes are shown against those that were budgeted for. Graphical structures: to reveal hidden facts

  • The Corporate Reporting Supply ChainACORD

  • How does XBRL leverage XML?XBRL adds to XML:Multi dimensional financial data representationsFinancial reporting vocabularies (taxonomies)Aliases and other definition relationshipsMathematical relationships between conceptsFlexibility about how to present items to usersStructure for authoritative policies and guidanceReporting apps need these even when using XMLCalculationsCash = Currency + DepositsPresentationCash & Cash EquivalentsFormulas Cash 0ReferencesGAAP I.2.(a)CoA 1100DefinitionsAKA Liquid Assets LabelUS $FY2003BudgetedXBRLItem200

  • Solution developmentStep 1.CompanyRegulatorProblem = Exchange ofdata between regulatedentity and regulator

  • Solution development.Regulator PerspectiveCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyRegulatorXMLSchemaCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyCompanyProprietary solution for RegulatorLooks good to the regulator

  • Solution development.Company PerspectiveRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorXMLSchemasRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorRegulatorCompanyProprietary solutions looks different to the companiesand is a costly and complexmodelRegulator

  • Solution developmentStep 2. CompanyRegulator

  • What you can do? ..with a new tool.Internal ReportingEnhance Reporting Processes (ADT)Enhanced Reporting (ValueReporting)Benchmarking (ADT)Taxonomy developmentConnectivity to internal reporting policiesOptimized Reporting Templates Intra-organizational reporting (ADT)

  • What you can do? ..with a new tool.Internal ReportingRisk Management (ADT)Visualization Modeling (ADT)Compliance Reporting (ADT)Compliance Assessments (ADT)Compliance Monitoring (ADT)Compliance Monitoring (ADT)Continuous MonitoringContinuous Auditing

  • CPAs and the Company Business Information Supply ChainMike WillisFounding Chairman, XBRL InternationalPartner, PricewaterhouseCoopers

  • Lower Costs[financial services] companies can reduce their publishing expenses 46%, by adapting an XML centric means for document development, assembly and distribution.

    Zap Think, March 2002 Financial Services XML Report

  • The Corporate Reporting Supply ChainACORD

  • Benefit ConsiderationsXBRL benefits for consumers Enhanced analytical capabilitiesMore timely, accurate, data for decisionsEnhanced functionalityEase of useFacilitates language translations

    XBRL benefits for producersTell your own story (precise & clear)Accelerate adoption of reporting modelsEnhanced functionalityEase of useBetter control environmentEnhanced analytical capabilitiesMore timely, accurate, data for decisions

  • Benefit ConsiderationsXBRL benefits specifically for regulatorsEnhanced functionality of informationMore timely, accurate, information for decisionsEnhanced analytical capabilitiesPromotes more effective processesAccelerates adoption of reporting changesIncludes regulatory input and perspectivesLowers cost of regulation by spreading development among collaborators

    Enhanced effectiveness of supply chain

  • XBRL Ready for Prime Time?Some critics have suggestedthat XBRL is not ready forprimetime. In fact, it is.

    Hon. Richard H. BakerChairman, Capital Markets Subcommittee

    While all companies have a consolidation package..which works for the debit and credit data environment; they also still have the excel worksheet hell environment operating in parallel. It is this parallel data aggregation model that is typical human control in nature and operating at a frequency driven by regulatory requirement rather than management desire.

    Benefits to Companies

    Standardized XML schema produces consistent data aggregation and supports consistent reporting environmentBusiness logic coupled with Web services provides real time risk reportsExtensible data interfaces have lower maintenance costsMinimal impact on current working processes

    Benefits to Companies

    Standardized XML schema produces consistent data aggregation and supports consistent reporting environmentBusiness logic coupled with Web servi

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