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

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

3 From Evansville Courier and Press Is There A Problem?

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

5 How does it work? XML gives meaning to information through the use of tags Liv A. Watson Edgar Online Inc. Director 22 Caution.. …Just because something is.. Does not mean it is accurate?

6 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

7 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

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

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

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11 XML Technologies Markup –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)

12 Standards – W3C Recommendations Extensible Markup Language 1.0 Core transfer syntax Namespaces in XML How to uniquely qualify element and attribute names Document Object Model (DOM) Level 2 API for walking, manipulating and creating XML documents XML Schema Part 1: Structures XML-based language for defining XML documents XML Schemas Part 2: Datatypes Textual data types and XML-based language for user-defined types XML Path Language (Xpath) Version 1.0 Language for selecting nodes in an XML document XSL Transformations (XSLT) Version 1.0 Language for transforming XML document formats XML Information Set Defines the information in a well-formed XML document

13 Bon Jour! Hejsan? Hello? 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

14 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.

15 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.

16 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.

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18 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.

19 XBRL Issues Foundational Conflicts Document centric traditional disclosures Data centric XBRL disclosures Human usage PrintWeb Data extraction 

20 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

21 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

22 Concluding Remarks…..

23 Questions and Answers