What Every Accountant Can Learn from XBRL

What Every Accountant Can Learn
from XBRL
Neal J. Hannon, CMA (inactive)
University of Kansas
Department of Accounting & Information Systems
Florida Institute of CPA’s
December 2011

1

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

2

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 day
Publicized the Method of Venice
Helped to spread literacy in the middle class

Luca Pacioli—the ―Father of Accounting‖
A mathematician and merchant
Became a Franciscan friar
Franciscans came out of, and ministered to, merchant class
Did not invent double-entry accounting but spread the knowledge

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

Debit
Comes from the Italian ―debito‖
which comes from the Latin “debita” and “debeo”
which means:
OWED TO the proprietor
or an asset of the proprietor

Credit
Comes 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 world
Accountants in each country adapted accounting practices
to suit their:
Cultures
Laws & regulations
Capital market structures
Environments

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.

First SEC Mention of XBRL

XBRL Committee Encouraged by SEC Chairman Arthur Levitt's Recommendation
That It be Expanded and Used by Investors and Companies
Business Wire, Oct 30, 2000
Business Editors
NEW YORK--(BUSINESS WIRE)--Oct. 30, 2000
In 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.

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!‖

Do You Remember Vinyl Records?

Had to Play
from start to
finish

Record could be damaged if you attempted
to play a specific track.

Vinyl Records And Disclosures

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.

Then Came Digital Music

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

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

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.

Scope and Role of XBRL

XBRL for G/L XBRL for Financial
Journal Entry Statements
Reporting

Interna Externa
Investme
l l
nt, Economic
Processes Business Financi Financi
Lending, Policyma
Operations al al
Regulati king
Report Reporti
on
ing ng

XBRL XBRL XBRL XBRL

Financial
Publishers Central
Companies Investors
Participants and Data Banks
Aggregators

Trading Management Auditors Regulators
Partners Accountants

Software Vendors

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 on
your company‘s SEC disclosures?

A US GAAP XBRL Taxonomy ha

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

A US GAAP XBRL Taxonomy ha

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.

Analysts Current
Investors Reporting Practice

CFO
Investor Relations
GAAP,
SEC Regulations
Codification project
Audit check lists
US GAAP Taxonomy
XBRL
Development Effort protocols
FAF, XBRL US

Key concept:
Create a Data model
Internal and public Taxonomy
testing
Release

XBRL

The Accounting’s Inside

Standard Label

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

Standard label in XBRL:
RevenueRecognitionAccountingPolicyGrossNetRevenueDisclosure

34

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.

35

Authoritative Reference

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

36

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!

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

43

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>

44

A Remaining Problem (Implied vs. explicit)
Company Property, Plant and Sales Cost of Goods
Equipment Sold
Staples Total property and Sales Cost of goods sold
equipment and occupancy
costs
ExxonMobil Property, plant, and Total revenue Crude oil and
equipment, at cost, less and other product
accumulated income purchases
depreciation and
depletion
Intel Property, plant and Net revenue Cost of sales
equipment, net
Amazon.com Fixed assets, net Net sales Cost of sales
IBM Plant, rental machines and Total revenue Total cost
other property

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

Source: company annual reports 45

Where XBRL
Comes In

46

Some XBRL Terms

Context GrayCo
Income Statement
Label Year ended Dec 31, 2008 Attribute
(millions)
2008 2007
Sales $ 145 $ 132
Cost of Goods Sold 101 92
Gross Profit 44 40
Sales, general, and Value 10 8
administrative
Net Income $ 34 $ 32

47

What XBRL is based on ..

XML Specifications
Builds
Modules

XBRL Specification
Bind to
Domain
Taxonomy
Builds

Instance Document

48
48

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
49

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

50

Anatomy of an XBRL Element

Financial XBRL
Reporting Concept Element

51


52


53

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

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

Ack
54
Draft
United Kingdom GAAP Commercial and Industrial

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
55

Extension Taxonomies

 Why you might need an extension taxonomy
1. 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.

56

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

First Raleigh Company Specific Terms
Bank
Terms
US GAAP
Bank
Terms Industry Terms

US GAAP
FS
Terms
US GAAP
Foundation Terms
Primary
Terms

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.

59

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.
60

Company Financial Statement
XBRL Taxonomy
Created by XBRL Consortium

TAGGING

Creation
XBRL
XBRL Document
Created by Preparer

AT 101
Assurance

61

Software Used

Six Steps to XBRL , Journal of Accountancy, Feb. 2008
65
65

XBRL:
A World-Wide
Phenomenon

66

Services architecture leveraging taxonomies

Transaction and
or subsidiary Viewing and aggregation for
Data department & management
Controls ‗Wrap & Map‘
ACORD
XBRL GL

Controls
ACORD XBRL
Web
Senior
XBRL GL Services Management

Controls
ACORD Controls
XBRL GL
Controls
Controls
81

The Answer - XBRL GL

System 1 System 2 System 3
XBRL GL XBRL GL XBRL GL

Account# Account Number Identificador de la Cuenta
accountMainID accountMainID accountMainID
Description Account Description Descripción Principal de la Cuenta
accountMainDescription accountMainDescription accountMainDescription
Amount Entry Amount Monto Monetario
amount amount amount
PostDate Posting Date Fecha de Asignación/Ingreso
postingDate postingDate postingDate
82

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

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

84

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] 87

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

88

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

89

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.

90

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…

91

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!)

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

93

Preparation & Assurance Questions 1

 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 94

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?

95

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).

96

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.

97

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.

98

Agreed-Upon Procedures

 Firm’s report identifies procedures
performed and results.
 Report does not express an opinion
and 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

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?

100

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]

101

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.

102

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.

103

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.

104

Management Assertions (SAS 106) & Related Audit
Objectives

Assertions about account balances Audit Objectives
 Existence  Validity
 Completeness  Completeness
 Rights and Obligations  Ownership
 Valuation or Allocation  Valuation
Assertions about classes of transactions and  Cut-off
events  Classification
 Occurrence  Disclosure
 Completeness
 Accuracy
 Cutoff
 Classification
Assertions about presentation and disclosure
 Occurrence and rights and obligations.
 Completeness
 Classification and understandability

Based on research of Srivastava & Kogan 105

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)

106


 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)

107


 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)

108

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

109

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

110

US GAAP Taxonomy 2011

111

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

112

Yeti – A Taxonomy Reader

114

SEC‘s Interactive Data Site

115

XBRL Cloud‘s EDGAR DASHBOARD

117

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.

118

Accounting Standards Codification

119

SEC‘s EDGAR System

121

XBRL US Smart Phone App

127

Acknowledgements

Mike Willis and Eric Cohen, Charlie Hoffman,
PwC EDGAR Online
Yossef Newman, Walter Hamscher,
Deloitte Standard Advantage
Liv Watson, Jan Pasmooij, Royal NIVRA,
XBRL International Netherlands
Roger Debreceny, Clinton ―Skip‖ White,
U. of Hawaii U. of Delaware
Raj Srivastava, Glen Gray,
U. of Kansas Cal State Northridge
Greg Zegarowski, Financial Amy Pawlicki,
Leadership Corporation AICPA
Paul Penler, XBRL International
E&Y XBRL US
Center for Audit Quality

Apologies to anyone I missed.
128

Questions?

Thank You

hannon@ku.edu

129

What Every Accountant Can Learn from XBRL

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