Assurance & XBRL: Status Update
XBRL-US Conference
Washington, DC
19 July, 2005
Agenda
• What is the Need?
• What is the AICPA doing?
• Where are we now?
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Scope of Today’s Discussion
XII Assurance Working Group
• Presentations to the IAASB, IFAC
AICPA’s Special Work Group on Assurance & XBRL
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Agenda
• What is the Need?
• What is the AICPA doing?
• Where are we now?
4
The need
XBRL is to the “printed”
annual report, what the
internet is to the printed
Yellow Pages.
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What about Assurance?
“A general perception is that the ability to provide
third-party assurance is required for instance
documents to be accepted in the marketplace.”
Stephanie Farewell and Robert Pinsker, The CPA Journal Online, May
2005
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What about Assurance?
“When the auditors show up to offer their opinion as
to whether your financials fairly represent the state of
your company, which form of financials do they offer
their opinion on? The XBRL? Or some kind of
printed version?.”
Bill Zoellick at April 27, 2005, Gilbane Report Blog
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The Need
In April 2005 the SEC began it’s Voluntary Filing Program
(VFP).
– Companies may elect to furnish XBRL versions of their
10K and 10Q filings, in XBRL format.
– XBRL-Related Documents do not replace existing filing
requirements.
– Volunteers are required to continue to file their official
EDGAR filings.
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What is the SEC’s Voluntary Filing Program?
• Some rules:
– The XBRL-Related Documents must be described as either
“unaudited” or, for quarterly financial statements, “unreviewed.”
– Volunteers are required to provide cautionary language advising
investors that the purpose of furnishing XBRL data is to test the
format and the technology and, as a result, investors should not rely
on the XBRL data in making investment decisions.
– Volunteers must reference the official filing from which the data in
the XBRL-Related Documents was derived.
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Agenda
• What is the Need?
• What is the AICPA doing?
• Where are we now?
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AICPA’s Special WG on Assurance and XBRL
• Objective: to develop Practitioner’s Guidance:
The objective is to provide detailed practitioners
guidance for auditors, focused on PCAOB attest
standard AT101, providing sample:
• audit plans
• work papers
• client documents
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AICPA’s Special WG on Assurance and XBRL
• History of the Special WG:
The AICPA Special WG on Assurance and
XBRL began in 2003.
The primary output was the precursor to what
became the Q&A provided from the PCAOB .
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AICPA’s Special WG on Assurance and XBRL
• What
– January 2005: re-convened the Special working group on assurance
and XBRL
– Joint WG with:
• Deloitte
• E&Y
• Grant Thornton
• J H Cohn
• KPMG
• PwC
– Scope limited to providing assurance within the scope of the PCAOB’s
AT101 Q&A.
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AICPA’s Special WG on Assurance and XBRL
• The Plan
– Educate the Professional Standards people within the firms,
“What is XBRL?”
– Develop a mock audit plan (“Examination Plan”)
– Execute the mock audit plan
– Learn & provide feedback, to the industry, and to XBRL
– Publish practitioner guidance: Sample work programs, etc
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Some issues?
• Some of the issues that have been raised
in the process:
– An assumption that the same firm audited the
underlying financials
– Compliance / conformance with taxonomy
– Auditor report in XBRL filing
– Requirement to “reflect the same information”
– External to AT101 (digital signatures, etc)
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Agenda
• What is the Need?
• What is the AICPA doing?
• Where are we now?
16
Current Status?
• Profession standards people trained
• Mock audit-programs written and discussed within the WG
• Mock audit-planning completed
• Mock Audit of an XBRL VFP Filing is under way, with participate
from:
– “Big 4”
– Grant Thornton
– J H Cohn
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Current Status?
• Objective is to publish guidance by the
end of September 2005
– Sample Examination (audit) plans
– Sample work-papers
– Sample client-side documentation
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The need
XBRL is to the “printed”
annual report, what the
internet is to the printed
Yellow Pages.
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