Connecting with XBRL

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International Conference on XBRL Current Issues
and Future Directions
Providing Assurance on XBRL Instance Documents of
FinancialInformation
October 24, 2003 Paul Penler, Ernst Young
Global XBRL Leader AICPA XBRL Implementation Task
Force Chair
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Agenda

• Why Now?
• Why is Assurance Important?
• Specifics of AT 101 Interpretation

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Why Now?

• Since the inception of XBRL in 1999, it has been
  perceived that the ability to provide third party
  assurance is required for the acceptance of XBRL
  reports in the market place.  
• We expect increased numbers of XBRL Instance
  Documents of audited financial statements in the
  market.
• It is to the best interests of the market, and to
  auditors, that the profession provides guidance
  on this emerging challenge in a clear,
  consistent, effective and efficient manner
  prior to the existence of thousands of XBRL
  Instance Documents of audited financial
  statements.

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Emerging Use of XBRL

• Several public companies have posted XBRL
  Instance Documents of their financial statements
  on their web sites some have even submitted to
  regulators.
• Several Banks are assessing or piloting solutions
  to have borrowers submit their financial
  statements in XBRL to Lenders.
• Several regulatory agencies have already
  implemented XBRL,are implementing XBRL or are in
  the process of evaluating XBRL.
• In a few years, XBRL may be the primary medium in
  which financial statements, and other financial
  reports, are submitted to Regulators and Banks.

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Why is Assurance Important?

• To the Market
• Users will want to obtain confidence that the
  electronic version of the financial statements
  are the same as the human readable version.
• To Assurance Providers
• The ability to extend assurance on the financial
  statements to this new electronic medium is a
  reasonable evolution of the auditing profession.

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Viewing a XBRL Instance Document
There has been some discussion as to the
requirement that an XBRL Instance Document
needs to be viewed through a piece of software.
The viewing of an XBRL Instance Document (.XML)
through a software application, is very similair
to viewing a finacnial statement in a PDF format
in an Acrobat Viewer. Both .XML and .PDF files
need a software application to be fully
comphrehendable. However, both could be viewed
raw in an application like Microsoft Notepad.
PDF Viewed In Notepad - Example
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XBRL Assurance Questions Being Addressed

• Do existing audit standards provide a framework
  for providing assurance on XBRL financial
  statements?
• What is the recommended approach for providing
  assurance on XBRL financial statements in the
  short term?
• What enhancements to existing standards are
  required to allow for a more robust XBRL
  assurance environment?
• What is the recommended path forward to resolve
  the longer term assurance issues?

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Business Requirements

• The original assurance on the audited financial
  statements stays with the XBRL Instance
  Document
• No distribution limitations on the report related
  to the XBRL Instance Document
• The solution cannot be cost prohibitive
• The Instance Document is incorporated as part of
  an overall client deliverable (e.g. annual
  report) that includes audited financial
  statements and report

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Where we are today ASB Sept 2003

• Attest Engagements, of SSAE No. 10, Attestation
  Standards Revision and Recodification, applies
  to engagements in which a CPA in the practice of
  public accounting is engaged to issue, or does
  issue, an examination, a review or an agreed-upon
  procedures report on subject matter, or an
  assertion about the subject matter, that is the
  responsibility of another party. Chapter one of
  SSAE No. 10 establishes a framework for attest
  engagements performed by practitioners and for
  the ongoing development of related standards.
  For certain subject matter (such as financial
  forecasts and projections, pro forma financial
  information, internal control over financial
  reporting, compliance attestation, and
  managements discussion and analysis), specific
  attestation standards have been developed to
  provide additional requirements for engagement
  performance and reporting.

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Attestation Standards - AT 101 Interpretation

• CPAs can provide assurance today on companys
  XBRL Financial Information
• Criteria
• Taxonomies
• Technical Specification
• Who performs audit?
• Audited and Un-audited Information

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Questions?
Paul Penler, Principal, Ernst YoungAICPA XBRL
Implementation Task Force Chair paul.penler_at_ey.
com