International Federation of Accountants
Assurance for Digital Reporting
James M. Sylph
Executive Director, Professional Standards, IFAC
World Congress of Accountants, Istanbul – November 15, 2006
XBRL – From Concept to
Generally Accepted Standard
• XBRL’s goal is to satisfy the diverse and critical needs of
many stakeholders to increase transparency in the
marketplace
• Activity to date has been mostly with regulators
• Companies, investors and lenders are likely to be users and
consumers of XBRL information in the future
• Widespread adoption of XBRL must continue to pass
various technical, regulatory and administrative milestones
Current State of Financial
Reporting Process
• Statutory and regulatory requirements dictate the
applicable financial reporting framework that drives the
form and content of audited financial statements and unaudited interim financial information
• Traditional financial statements are converted to XBRL
format and made available to users
• Assurance is provided on the audited financial statements
Future State of Financial
Reporting Process
• In the short to medium term, it is reasonable to expect that:
―Information in XBRL format, whether filed on a
mandatory or voluntary basis, will be in addition to the
existing information
―Any assurance required on the XBRL information will:
• Be in response to mandatory regulatory requirements
• Cover the ‘conversion’ of the financial information in
its traditional form into XBRL format
Example
XBRL
ASSURANCE
Data in a source document
Accurate and appropriate
or in data files is tagged and
Tags have been used
represented independently,
without loosing context,
The instance document
within an instance document
includes the same information
as the human readable
version
Example
XBRL
ASSURANCE
Tagged data is mapped
to the taxonomy
The appropriate taxonomy
has been used and has been
properly applied
Example
XBRL
ASSURANCE
XBRL instance documents
The XBRL file is able to be
are a collection of data and
‘electronically consumed’
explanatory tags, optimized
because it complies with
to be read by computers, not
XBRL technical specifications
humans
Future State of Financial
Reporting Process
• If and when XBRL becomes the generally accepted
standard, regulators will need to mandate changes to the
traditional financial reporting model and mandate the
required assurance
• Other users will define their needs for timely information
over and above the financial statements and whether they
require assurance on that information
IAASB – Call for Action
• Close monitoring of XBRL developments
• Liaison with XBRL community
• Dialogue with regulators
• Clearly define the user needs for assurance services in
order to develop standards that will respond to those
needs
IAASB – Future Agenda
• Next 18 months full agenda
• Wide consultation through 2007 on future agenda
• Include focus groups and public exposure
• Will consider competing priorities for 2008 onwards