CPA

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CPAs and the Company Business Information
Supply Chain

• Mike Willis
• Founding Chairman, XBRL International
• Partner, PricewaterhouseCoopers

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Business Trends

• Detroit Automobile Company, 1899
• Ford, 1903
• The impact
• 1908
• 12 to 14 hours to assemble
• 1000 price per car
• 1914
• 93 minutes to assemble
• 360 price per car
• 1929
• 1 in 5 Americans owned a car

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Business Trends (cont.)

• 1974
• Average Grocery Store had 9000 SKUs
• Chewing gum sale in Ohio changed that forever
• Today UPC implications
• 17B annual savings in grocery chain savings
  alone
• Average Store over 30,000 SKUs
• Greater controls over assortment, inventory
  levels and pricing
• Scanning /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
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Open Standards Discussion Topics

• Company Applications
• Operational Use
• Risk Credit Assessment
• Internal Reporting
• External Reporting

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The Corporate Reporting Supply Chain
What
ACORD
XBRL Ledger
XBRL Financial Statements
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The Corporate Reporting Supply Chain
What
ACORD
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Management Reporting Current Architecture
Transaction Data
Multiple Departmental Excel Spreadsheets
Consolidated spreadsheets for management
Senior Management
Email File Servers
2000 elements
6500 spreadsheets (this is not a typo)

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Management Reporting Current Architecture
Transaction Data
Multiple Departmental Excel Spreadsheets
Consolidated spreadsheets for management
Senior Management
Email File Servers
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Internal Reporting
Subsidiary ERPs
Senior Management
Supplemental information aggregation
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Web Services Architecture
Transaction and or subsidiary Data
Viewing and aggregation for department
management
Web Services
Schema
Senior Management
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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

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• 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?

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Visualization A better way of analyzing
information today
Most information today is in columns of numbers
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Visualization A better way of analyzing
information today
Business templates to portray financial/non-finan
cial information

• Identified 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.

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Visualization A better way of analyzing
information today
Statistical analyses to identify trends and
outliers

• The 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. gt 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.

• Monthly 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 variable

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Visualization A better way of analyzing
information today
Graphical structures to reveal hidden facts

• Possible 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.

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The Corporate Reporting Supply Chain
ACORD
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How does XBRL leverage XML?

• XBRL adds to XML
• Multi dimensional financial data representations
• Financial reporting vocabularies (taxonomies)
• Aliases and other definition relationships
• Mathematical relationships between concepts
• Flexibility about how to present items to users
• Structure for authoritative policies and guidance
• Reporting apps need these even when using XML

Definitions AKA Liquid Assets
References GAAP I.2.(a) CoA 1100
Presentation Cash Cash Equivalents
XBRL Item 200
Calculations Cash Currency Deposits
FormulasCash 0
Label US FY2003 Budgeted
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Solution developmentStep 1.
Problem Exchange of data between
regulated entity and regulator
Company
Regulator
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Solution development.Regulator Perspective
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Proprietary solution for Regulator Looks good to
the regulator
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Solution development.Company Perspective
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XML Schemas
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Proprietary solutions looks different to the
companies and is a costly and complex model
Regulator
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Solution developmentStep 2.
Company
Regulator
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What you can do? ..with a new tool.

• Internal Reporting
• Enhance Reporting Processes (ADT)
• Enhanced Reporting (ValueReporting)
• Benchmarking (ADT)
• Taxonomy development
• Connectivity to internal reporting policies
• Optimized Reporting Templates
• Intra-organizational reporting (ADT)

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What you can do? ..with a new tool.

• Internal Reporting
• Risk Management (ADT)
• Visualization Modeling (ADT)
• Compliance Reporting (ADT)
• Compliance Assessments (ADT)
• Compliance Monitoring (ADT)
• Compliance Monitoring (ADT)
• Continuous Monitoring
• Continuous Auditing

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CPAs and the Company Business Information
Supply Chain

• Mike Willis
• Founding Chairman, XBRL International
• Partner, PricewaterhouseCoopers

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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

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The Corporate Reporting Supply Chain
ACORD
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Benefit Considerations

• XBRL benefits for consumers
• Enhanced analytical capabilities
• More timely, accurate, data for decisions
• Enhanced functionality
• Ease of use
• Facilitates language translations
• XBRL benefits for producers
• Tell your own story (precise clear)
• Accelerate adoption of reporting models
• Enhanced functionality
• Ease of use
• Better control environment
• Enhanced analytical capabilities
• More timely, accurate, data for decisions

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Benefit Considerations

• XBRL benefits specifically for regulators
• Enhanced functionality of information
• More timely, accurate, information for decisions
• Enhanced analytical capabilities
• Promotes more effective processes
• Accelerates adoption of reporting changes
• Includes regulatory input and perspectives
• Lowers cost of regulation by spreading
  development among collaborators
• Enhanced effectiveness of supply chain

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XBRL Ready for Prime Time?
Some critics have suggested that XBRL is not
ready for primetime. In fact, it is. Hon.
Richard H. Baker Chairman, Capital Markets
Subcommittee