XBRL Audit

7/28/2019 XBRL Audit

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XBRL: the business reporting

supply chain and audit impacts

Neal Hannon, Co-Chair XBRL Education Committee

Bryant College


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XBRL: Todays

Overview

A picture to start.

e-business What does it really mean?

XBRL Who

What

When

Why

intro


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This is the initial pop quiz

It is a perception test

Describe What You See?

quiz


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Here Are Some 'Normal' Thoughts,

but lets hear some More.

A guy in an office.

Sleeping on the floor.

Programmer.

Computer engineer.

Shares the cubical space with anotheremployee.

Trashed desk, overflowing junk everywhere.

29ish look.

Loser?

Picture


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Why Is This Relevant?

He works at a '.Com' company.

The current market cap for the

Company is $57B.

They make money. ($78M NetIncome/$132m in cash flow last quarter).

He is the CEO.

The company was founded in 1995.

He is worth approx. SIX billion today.

He was worth $500Mwhen the picture was taken.

Picture


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So Who is that Guy?


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If you search for the word Mercury on the what would you get?

Hg

Browsing the Web (Content

without Context)

quiz


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Change in the supply chain is powerful

The EDI model The e-business model

The efficiencies driven from / in supply chains are significant. Not all will survive.

Each has an EDI model

that is costly.

Channel has a common model

e-business


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The Range of what is under

development today...

A

CORD

ANX

Ro

settaNet

F

pML

CH

EMX

HR

CRM

AM

Horizontals

(Infrastructure)

there are others..

Verticals (Industry Supply Chains)

there are others.

e-business


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What is XML?

Published as a recommendation by the W3C (WorldWide Web Consortium) in early 1998.

Uses tags to give context and structure to the content

Provides a common way for disparate systems to

exchange specific information (applicationintegration)

Provides a means to separate data from style (so asingle source can be output for multiple uses)

Separates data from logic of applications (so that it canbe reused for multiple purposes).

e-business


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So when will this happen??

A. Never.

B. After I retire.

C. Before I retire but too late for me tohave to worry about it.

D. Sooner than I want to admit, but I still

have enough time to procrastinate.E. Next five years.

F. Next two to three years.

e-business


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CFO Magazine on Investor

Relations

" The explosive growth of the internet is not

only changing the way companies conduct

their business, it also promises to foreveralter the way they communicate businessperformance. Information availabilitymay soon determine which companies benefit

from market insight and which are hur t by

market ignorance.- CFO magazine, February 2000.

App to fin rep


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Another Quiz?

What word goes in the space?

_____?____ is the language of business

_____?____is the language ofe-business

XBRL - Why

Accounting

XML


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The Internet Enablement of

Reporting

XBRL = eXtensible Business

Reporting Language

A new economy language for

business information, reportingand analysis.

App to fin rep

h


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XBRL Working Model:

Planned Specifications

ExternalFinancialReporting

BusinessOperations

InternalFinancialReporting

Investmentand Lending

AnalysisProcessesProcesses

ParticipantsParticipants

AuditorsTradingPartners

InvestorsFinancial

Publishersand Data

Aggregators

Regulators

XBRL for G/LJournal Entry

Reporting XBRL forRegulatory Filings

Today

XBRL for Financial

Statements

XBRL for AuditSchedules XBRL forCredit FilingsXBRL for BusinessEvent Reporting

Software Vendors

ManagementAccountants

Companies

XBRL - What


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What software seesis the differentiator

and drives benefits(here is an example)

..\..\..\Program Files\XBRL Demo\XBRLDemo.xls

XBRL Wh
http://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xlshttp://localhost/var/www/apps/Program%20Files/XBRL%20Demo/XBRLDemo.xls


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Financial Institutionsand

their Users

SMALL BUSINESS provides FINANCIALINSTITUTION with their information in XBRL andreceives loan approval in less than a day instead of twodaysor two weeks.

With XBRL?Mechanics More Time for Analysis => Better Analysis => Less Risk

Value-added Analysis and Decision-making?


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Key XBRL Components

XBRL / XML Specification (XBRL.org)

Global architecture/technology

XBRL hierarchical vocabulary (jurisdiction/industry)

Dictionary of terms by jurisdiction/industry sector

Style Sheets (preparer)

XBRL enabled tools (market)

XBRL - What

XBRL Wh


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So What??. show me the

money

Reduces cost to publish information

Significantly reduces cost to use the information

Increases the speed of use and related decisions

New concepts of using existing financial

information.

Virtual documents

Comparison of all components, including disclosures

Linkage to related topics

XBRL - Why

XBRL Wh


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What might this enable?

User reporting/analysis on a personalized basis.

Agents monitoring key indicators.

What is your temperature and blood pressure right now?

More relevant reporting in the dawning of theASP/outsourcing environment.

How many routers did Cisco manufacture last year?

Virtual closings.

Enhanced insights and transparency.

Quicker, Cheaper and faster decisions.

XBRL - Why


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The Growing XBRL Family


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http://www.newriver.com/http://www.netledger.com/http://www.innovision.com/http://www.infoteria.com/http://www.ilumen.com/http://www.finarch.com/http://www.epacesoftware.com/http://www.elementalinteractive.com/http://www.hksa.org.hk/


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http://www.kpmgconsulting.com/http://www.hksa.org.hk/


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http://www.ppcnet.com/http://www.holtvalue.com/http://www.spu.edu/depts/cpd/


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http://www.spu.edu/depts/cpd/http://www.navision-us.com/http://www.nii.org.tw/


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XBRL and Auditing;

What Changes?

XML provides the potential for additional

information

XBRL creates nothing new


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Auditing Systems Using XBRL

I. Planning, Implementing and Maintaining an

Integrated Audit Program - Integrated

Auditing Defined - Integrating the Audit Group(IS and Financial) - Integrated Audit Planning

Procedures - Risk Assessment Procedures

and Techniques


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Auditing XBRL Systems

II. Mainframe Systems Software and Control -

Operating System Concepts - Security

Applications (ACF2, RACF) - DatabaseSoftware (IMS, DB2) - Operations Software

(Librarian, Schedulers, Change Control)


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III. Audit of the Systems Development

Process - General Controls within System

Development Process - Audits ofDevelopment Groups - Auditing Purchased

Systems - Auditing In-house Development

Systems - Linking SDLC Audits to Integrated

Application Audits


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IV. Advanced General Control Audits -

Mainframe Audit Program - Audit of the DBA

Function - Audits of the Technical SupportAreas

V. Audit and Control of the LAN & Database

Environment - Understanding Dbase Controls

- Database Security - Database Backup andControl - Using Database Tools - LAN

Administrative Issues


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VI. Audit's Role in Pre-Implementation

Projects - Relating Pre-implementation

Reviews to General Controls - AuditMethodology for Pre-Implementation Audits

VII. Advanced Application Auditing - Auditing

Integrated Application - Structured Auditing --

Using Forms and Automated Workpapers -Advanced CAAT TEchniques - Using Audit

Command Language (ACL)


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Is Auditing Different With

XBRL?

It Depends on

Representation of financial information

Who is relying on the data and why

How are the XBRL tags applied

Validity of the taxonomy used


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Is Auditing Different With

XBRL?

Special Needs

Care and feeding of Instance documents

Updating Taxonomies Audit Scope Issues


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Three Levels of Understanding

Auditing of XBRL financial statements requires

understanding:

The system that created the numbers The XBRL taxonomy that mapped the financial system

The Instance of XBRL document that is used to create

reports


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XBRL: the business reporting

supply chain and audit impacts

Neal Hannon, Co-Chair XBRL Education Committee

B C ll XBRL Ed i l R C

Documents

XBRL Audit