improving audit with, and auditing, xbrl gl eric e. cohen [email protected] 12 th xbrl...
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Improving Audit with, and Auditing, XBRL GL
Eric E. [email protected]
12th XBRL International ConferenceTokyo November 2005
Background This far, you have heard about XBRL GL and
Internal reporting Internal controls IT controls
In this session, you will learn about Audit community interest in XBRL GL Representing a seamless electronic audit trail Active participation – catalyst to benefits
Scope and role of XBRL
ExternalFinancialReporting
BusinessOperations
InternalFinancialReporting
Investment,Lending,
RegulationProcesses
Participants
AuditorsTradingPartners
Investors
FinancialPublishersand Data
Aggregators
Regulators
Software Vendors
ManagementAccountants
Companies
Economic Policymaking
CentralBanks
XBRLGL, the
Journal Taxonomy
XBRLFinancial Statements
Audit Community Interest OECD Taxpayer Services OECD Tax eAudit OASIS Tax XML
OECD SAF: Brief HistoryOECD Committee on Fiscal Affairs Forum on Tax AdministrationBegun to consider effect of electronic commerce on tax administratorsValue of a standard audit file in light of 25 EU countries auditing one multinational organization
OECD SAF -> OECD Tax eAudit Delivered two documents
http://www.oecd.org/document/57/0,2340,en_2649_33749_34910329_1_1_1_1,00.html
Guidance on Tax Compliance for Developers of Business And Accounting Software for Tax Purposes
Guidance for the Standard Audit File - Tax “[R]evenue authorities should be aware of the on-going development of
XBRL GL, which could offer a more holistic approach to audit. They should also be aware of international efforts to develop data standards for compliance needs under the formal OASIS Tax XML Committee.[2]
In their implementation strategy for SAF-T, revenue authorities should consider data formats that permit audit automation today while minimizing potential costs to all stakeholders when moving to new global open standards for business and financial data such as XBRL GL.”
OASIS Tax XML Under OASIS
www.oasis-open.org
In conjunction with OECD Taxpayer Services Delivered whitepaper Support for XBRL and specifically XBRL GL
Expressing interest in a global audit file standard Committing resources
Whitepaper URL http://www.oasis-open.org/committees/download.php/
14242/OASIS_XML_Position_Paper_for_Tax_Administrations_v2-01.pdf
The Seamless Audit Trail From initial transaction Through the system, monolithic or virtual To reporting Every system as XBRL GL
I N V O I C E May 2, 2003Invoice #: 10037
Item Description Qty Extension
1078 Blue Widget 200 2,803.781083 Cyan Widget 100 1,402.93
Sub-total: 47,592.33Freight:Total: 47,592.33
<documentType>invoice</documentType>
<documentNumber>10037</document Number>
<documentDate>2003-05-02</documentDate>
From Initial Transaction
Through ERP System Actual/Virtual
GENERAL LEDGER
AR
IMbomp
APPR
customers vendors
items
employees
OEAR, IM
POAP, IM
sales orders
purchase orders
FA
assets
Outsourced procurement
REPORTING
Outsourced e-ordering
Off-site fullfillment
Third party payroll
XBRL “FR”
<xbrl taxonomy info …>
<unit of measure info> iso4217:usd<context holdingdate or period2006-06-30entity and segmentsMegacorpscenariosactual>
facts with fact value and pointers to above
ci:Equipment 5,400
DimensionalTaxonomy
XBRL GL<xbrl taxonomy info>Details underlying the 5,400 as provided in the system, and published in the instance
<xbrlInfo><summaryReportingElement>ci:Equipment</></>
To Reporting
System 3System 1
Identificador de la Cuenta
Descripción Principal de la Cuenta
Monto Monetario
Fecha de Asignación/Ingreso
勘定科目番号
勘定科目説明文
金額
転記日付
Account#
Description
Amount
PostDate
System 2
accountMainID
accountMainDescription
amount
postingDate
accountMainID
accountMainDescription
amount
postingDate
accountMainID
accountMainDescription
amount
postingDate
XBRL GL XBRL GLXBRL GL
Every System as XBRL
Seamless Audit Trail XBRL GL can represent any and all of the chain Cross referencing between XBRL GL documents
uniqueID and other tools
Of course, XBRL GL can only represent what is available
Flow: XBRL GL Can Represent
1. Trigger: a source document is represented electronically
2. Source Journal The document is entered and posted, creating a source journal.
3. Journal entries: The accounting implications are gathered and prepared for the GL.
4. GL Entries: the journal entries are prepared for posting to the GL.
5. Journal History: The entries are posted to the Journal History.
6. Consolidation: The data at journal entry or trial balance level are brought together.
7. Reporting: Consolidated numbers combine for eventual reporting.
PostingJournal
Invoice DistributionTo GL Report
SourceJournal
GeneralJournal
TransactionPosting
Journal History Report
Consolidating/Consolidated
Unique Attributes Between Stages
1. Document type, document #, C/V/E/O #, document date, physical location
2. Source Journal Code, number, date
3. Source system, entry number, posting date?
4. Entry number, posting date?
5. Originating organization
6. Mapping to reporting
7. ???
XBRL GL Can Capture the Fingerprints
Document number, type, date Party type,
ID
Document location
MD5, SHA1
Convert to/from XBRL GL
Convert to/from XBRL GL
Original paper or electronic document
Court system:Assigned number by liber and page
Can simply assign by a counter a unique number
Unique index:Document typeDocument numberDocument sourceDocument date
entryDetail only has one documentNumber
documentNumber can appear on many entryDetail
entryHeader can have many entryDetail
FR
TaxMgmt
Stat
Integrating the Preparatory Chain
EstimatesAccruals/ReservesAdjustments
CurrencyIntercompanyTop-side adjustments
TRACING
VOUCHING
XBRL GL As standard export format for an “audit file” …
and more Built in to audit software today As payload for Web services tomorrow
As Input to Audit Documentation
Audit Documentation:Trial Balance (XBRL GL or other XBRL)
Journal Entries, including various types of auditor’s entries(XBRL GL)
Financial Statements (XBRL)Planning Documents
Risk DocumentsAudit Programs/Checklists
Lead SchedulesEngagement Documents
Permanent Files (XBRL GL and others)(attached, embedded, referenced)
Internal cross references, tick marks, text and test libraries
Control and RiskAssessment
Planning
PersonnelScheduling
Performance
EngagementsProject planning
FinancialStatements
Auditor’sReports
Other analyses
ManagementReport
TestsObservations
Analyses
General Ledgerdata
FinancialStatements
Permanent Files
FindingsIssues
Exceptions
TicklersReminders
Status updates
Hard copy
CAATS and CA-AuD•Computer Assisted Audit Techniques•Computed Aided Audit Tools
•CA-AuD may•Have embedded CAAT capabilities•Rely on external CAAT services
•CA-AuD must•Capture procedures performed•Evidence obtained•Conclusions reached
•CAATs need to be smarter, communicate better
•Need CAAT/CA-AuD exchange vocabulary•Is it the right CAAT food for the test?•Evidence retention•Reporting
CA-AuD: Would you run this test for me please?CAAT: With pleasure – here is your query and results.CA-AuD: Thank you kindly. Hmm, I wasn’t expecting that. Can you increase the sample size?CAAT: With pleasure – here is your query and results.CA-AuD: Thank you kindly. Much better. That’s all for now.CAAT: All your base are belong to us.CA-AuD: Huh?
Interesting Audit Related Fields
Element (gl-cor) UsageuniqueID A “Serial number” for an accountingEntries structure
revisesUniqueID An indicator that this accountingEntries structure reflects a change to a previously provided batch of information, showing the original uniqueID from that accountingEntries structure
revisesUniqueIDAction An indicator that the new batch of information either replaces or adds to the original batch
Issues:•How can uniqueness for [uniqueID] across accounting systems, both within a single organization and across multiple organizations be encouraged?
Active Participation – Catalyst to Benefits MAP
Map to your systems and develop a prototype
GAP Influence your software developers
LAP Help us determine what’s next
OVERLAP Help with the XBRL GL to XBRL FR linkages
Additional Slides Organization of tax-related groups in OECD Cooperation with OASIS Tax XML and XBRL
OECDOrganization for Economic Cooperation and Development
CFACommittee on Fiscal Affairs
FTAForum on Tax Administration (2002)
ServicesServices Subgroup
ComplianceCompliance Subgroup
WP1Working groupsWP2
Working groups
WP9Working group 9
WP…Working groups
TIESTax Information
Exchange SystemSubgroup
SAF
StandardAuditFile
IWG
InformalWorking Group
STF
StandardTransmission
File
Deliverabl
es
OECD Tax Related Groups
* Note: this is not an official representation
FTAForum on Tax Administration (2002)
Services
Services Subgroup
ComplianceCompliance Subgroup
SAF
StandardAuditFile
Tax eAudit
formerly IWG
Deliverabl
es
OECD FTA, OASIS, XBRLOASIS
Organization for the Advancement of Structured Information Standards
OECDOrganization for Economic Cooperation and Development
Tax XML
Tax XML TC
XBRLXBRL Liaison WG
DomDomain WG
TechTechnical WG
XBRLExtensible Business Reporting Language
XBRL GL
XBRL GL WG
XBRL GL
XBRL GL