Is XML an enabler of Assurance Services? EDGAR ® NLINE O SM Is XML an enabler of Assurance Services? “Unlocking the Treasures of Standards” Presented by: Liv A. Watson Director – EDGAR Online

Agenda Communication Problems XML XML Standards Is XML an enabler of continuous auditing and assurances

Is There A Problem? From Evansville Courier and Press

What is XML (Extensible Markup Language) ? is a markup language for documents containing structured information. Consortiums Taxonomies Specifications

How does it work? XML gives meaning to information through the use of tags <Customer> <Name>Liv A. Watson</Name> <Company>Edgar Online Inc.</Company> <Title>Director</Title> <Age>22</Age> </Customer> Caution.. …Just because something is <tagged>.. Does not mean it is accurate?

Why is XML so Important? Portable Vendor neutral Readable data format More flexible and easier to use than EDI All major software products are becoming “XML” enabled Defacto standards for data exchange Enabling new levels of interoperability

Extensible Markup Language …is a meta markup language the World Wide Web Consortium (W3C) considers a universal standard for describing both structured data and the behavior of applications that process the language. XML

XBRL Adds Reporting to E-Commerce Investors Aggregators Regulators Creditors Lenders Tax Website One way BUSINESS ERP G/L Packages CRM 2-way Transaction Creation Suppliers Customers Orders A/P Delivery Orders A/R Delivery

XBRL Adds Reporting to E-Commerce BUSINESS Investors Aggregators Regulators Creditors Lenders Tax Website Transaction Creation ERP G/L Packages CRM Orders A/P Delivery Customers A/R 2-way Suppliers One way XBRL BUSINESS REPORTING (e-)Commerce OTHER XML INITIATIVES

XML Technologies Markup Presentation Schema Relationship/Queries eXtensible Markup Language (XML 1.0) Presentation eXtensible Stylesheet Language (XSL) eXtensible Stylesheet Language Transformations (XSTL) Schema Document Type Definition (DTD) Resource Description Framework (RDF) XML Data Schema Namespaces Relationship/Queries XML Linking Language (XLL) XML Query Language (XQL) XML is short hand for a set of that together provide a way of handling text in machine readable form. These are just a few of them…. XML 1.0 (Extensible Markup Language) The W3C recommendation for text based storage of structured data, by marking up a document in XML. XSL (Extensible Stylesheet Language) Flexible formatting and display of XML data like a CSS stylesheet – presentation. XSLT (Extensible Stylesheet Language Transformations) works with a style sheet to transform the XML docs for presentation – also allows applications to filter, reorder and add data elements when presenting the document. Current use of XML on the web is transformed into HTML for current non-XML browsers. RDF (Resource Description Framework) an application of XML specifying a structure for metadata for web resources. DTD (Document Type Definitions) and XML Data Schema – these can all be shared by documents - RDF being a data model and syntax and schema for metadata descriptions of Web Resources XML (Namespaces) Mechanism for resolving XML tag and attribute name conflicts in the DTDs used by authors – public in the form of unique URLS XLL (XML Linking Language) defines tags multi directional links and more generally, how documents will be able to retrieve information from each other. XQL (XML query language) extracting, transporting large amounts of data from XML docs or sending queries to XML sources

The Reason for Standards Hello? Hejsan? Bon Jour! There can be no doubt that standards are a desirable prerequisite for commerce - especially international trade and communications. However, the standards of which we are most concerned revolve around communication protocols and document standards. The Reason for Standards

XML Is a Standard The problem with standards …. But this is changing. Door opener. ‘XML? Yes, we can handle that.’ Normalization. Content type becomes irrelevant.

XML’s Role in the Continuous Assurance Market Place XML is making life easier for integrators. This is a good thing. XML is becoming the preferred format for many sources of financial information. The result: There are real opportunities for changing the way the business thinks about market data.

XML’s Contribution to a Continues Assurances A standard. We’re all talking the same language. Flexibility. All data types covered; flexible approach to display. Cost. Opportunities for significant savings vs. existing solutions.

New Application Features Focus on online processing rather than batch processing; Enable contextual message processing rather than stand-alone message transport; Allow concurrent, not sequential, exchange of information; Allow real-time data communication, processing and update capabilities.

XBRL Issues Foundational Conflicts Data centric XBRL disclosures Document centric traditional disclosures    Roger Human usage Data extraction Print Web

Single XML Vocabulary? It is a matter of… Timing Organizations need to decide when they can migrate to this new way of developing standards Education Organizations need to understand/utilize the standards methodology Governance Organizations need to understand their role in future standards development through the standards repository

References Wiley Publication Fall 2002 Miklos A. Vasarhelyi KPMG Professor of AIS Liv A.Watson, Director of XBRL- EDGAR Online, Inc. Brian L. McGuire, Ph.D. CPA, CMA Department of Accounting and Business Law School of Business University of Southern Indiana Rajendra P. Srivastava Ernst & Young Distinguished Professor and Director Ernst & Young Center for Auditing Research and Advanced Technology

Concluding Remarks….. Embrace Continous Assurances or .....

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