AICPA Assurance Services Executive Committee White Paper: The

Background on Developments
Related to XBRL & Assurance
Amy Pawlicki
Director – Business Reporting, Assurance &
Advisory Services and XBRL
 How will XBRL impact the financial reporting
process as we know it?
 Common Errors
 Auditor Implications
 AICPA XBRL Assurance Task Force work in
 Questions & Discussion
How will XBRL impact
the financial reporting process?
Fundamental issues
 XBRL tagging is very different from turning a
Word document into a pdf
 Tagging data is the equivalent of classifying
data in company financial statements and
 Currently, tagging is supplementary to the
traditional financial reporting process, and the
accuracy of tagging is not covered by the
traditional auditors report...
How will XBRL impact
the financial reporting process?
Example: Illustration of potential tagging risks
Source balance sheet element:
 Accounts Receivable, net of allowance for doubtful accounts
 Definition: Trade receivables, net of allowance for doubtful
Tag chosen from the appropriate standard taxonomy:
 Receivables, Net, Current
 Definition: The total amount due to the entity within one year of
the balance sheet date (or one operating cycle, if longer) from
outside sources, including trade accounts receivable, notes
and loans receivable, as well as any other types of
receivables, net of allowances established for the purpose of
reducing such receivables to an amount that approximates their
net realizable value.
Research discovers errors in VFP
 Missing elements and amounts
 Incorrect amounts
 Sign flips
 Duplication of items
 Incorrect tagging
Research conducted by NC State University, which
examined 22 company XBRL submissions under the
VFP and compared them to the related 10K filings
Common errors found in initial SEC
Interactive Data filings
 Extensions made when elements already exist in
standard list of tags
 Text block elements too broad
 Labels do not include the same text as html
document (including information in parenthesis)
 Extensions for monetary items require assignment of
debit/credit or definition, companies are not including
 New elements created with company-specific
information in the element name
Presented at SEC Public Seminar June 10, 2009
Auditor Implications
 The XBRL data that will be used by investors,
regulators and others is not necessarily the
same as the underlying, audited data
 In the US, SEC Rules do not require any
auditor involvement regarding the submission
of XBRL data, however issuers may
voluntarily seek auditor involvement as they
deem appropriate
AICPA XBRL Assurance Task Force
work in progress
 Center for Audit Quality Alert on Potential
Audit Firm Service Implications Raised by the
SEC Final Rule on XBRL
 Statement of Position on Performing Agreed-
Upon Procedures Engagements
 Consideration of issues related to evolution of
examination guidance post-VFP
CAQ Alert on Potential Audit Firm
Implications of SEC Rule on XBRL
 Potential services audit firms may be asked to provide:
 Advisory services
 Assurance services
 Agreed-upon procedures
 Examination of an assertion about XBRL-tagged data
 Examination of controls over the preparation of XBRLtagged data
 AT 601, Compliance Attestation
 Review of an assertion about XBRL-tagged data
 Other considerations related to XBRL-tagged data:
 Effect of submission of XBRL-tagged data on the
Independent Auditor’s Report
 Reference to other forms of reports
Statement of Position on Agreed-Upon
Procedures Engagements
 Company accepts responsibility for the subject matter
and the assertion
 Sufficiency of procedures is determined by the
company to meet its own needs
 Report is restricted use – not distributed beyond the
company nor included or referred to in an SEC filing
 Report is a detailed description of procedures and
findings only
 Time for engagement execution is relatively brief
 Cost may be managed based on defined scope
Consideration of issues related to
evolution of examination guidance
 Subject matter vs. management assertions
 Subject matter vs. criteria
 Materiality
 Scope
 Etc.
Questions and Discussion