XBRL: the business reporting supply chain and audit impacts Neal Hannon, Co-Chair XBRL Education Committee Bryant College

XBRL: Today’s Overview A picture to start……. ‘e-business’ – What does it really mean? XBRL – Who What When Why intro

This is the initial pop quiz……… It is a ‘perception test’……… Describe What You See? quiz

Here Are Some 'Normal' Thoughts, but let’s hear some More. A guy in an office. Sleeping on the floor. Programmer. Computer engineer. Shares the cubical space with another employee. Trashed desk, overflowing junk everywhere. 29ish look. ‘Loser’? Picture

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 He is worth approx. SIX billion today. He was worth $500M when the picture was taken. Picture

So Who is that Guy?

If you search for the word “Mercury” on the what would you get? Hg Browsing the Web (Content— without Context) quiz

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

The Range of what is under development today………... ACORD ANX RosettaNet FpML CHEMX HR CRM AM “Horizontals” (Infrastructure) there are others….. “Verticals” (Industry Supply Chains) there are others……. e-business

What is XML? Published as a recommendation by the W3C (World Wide Web Consortium) in early Uses tags to give context and structure to the content Provides a common way for disparate systems to exchange specific information (application integration) Provides a means to separate data from style (so a single source can be output for multiple uses) Separates data from logic of applications (so that it can be reused for multiple purposes). e-business

So when will this happen?? A.Never. B.After I retire. C.Before I retire but too late for me to have 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

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 forever alter the way they communicate business performance. … Information availability may soon determine which companies benefit from market insight and which are hurt by market ignorance.” - CFO magazine, February App to fin rep

Another Quiz? What word goes in the space? “_____?____ is the language of business” “_____?____is the language of e-business” XBRL - Why Accounting XML

The Internet Enablement of Reporting XBRL = eXtensible Business Reporting Language A new economy language for business information, reporting and analysis. App to fin rep

XBRL Working Model: Planned Specifications External Financial Reporting Business Operations Internal Financial Reporting Investment and Lending Analysis Processes Participants Auditors Trading Partners Investors Financial Publishers and Data Aggregators Regulators XBRL for G/L Journal Entry Reporting XBRL for Regulatory Filings Today XBRL for Financial Statements XBRL for Audit Schedules XBRL for Credit Filings XBRL for Business Event Reporting Software Vendors Management Accountants Companies XBRL - What

What software ‘sees’ is the differentiator and drives benefits (here is an example)..\..\..\Program Files\XBRL Demo\XBRLDemo.xls

How to get the demo URL has all of the instructions/steps for installing. The only tricky part would be installing the MSXML parser. You can get that from msdn.microsoft.com/xml. Need Excel, MS Access2000, pc, electricity, …..

Financial Institutions—and their Users SMALL BUSINESS provides FINANCIAL INSTITUTION with their information in XBRL and receives loan approval in less than a day instead of two days—or two weeks. With XBRL? Mechanics More Time for Analysis => Better Analysis => Less Risk Value-added Analysis and Decision-making? <10% Your Client: Average Time for Loan Processing—1.75 days 90% + time spent on Data Discovery and Mechanics Mechanics Analysis Mechanics Analysis Mechanics Analysis Mechanics Analysis Or Process more loans in the same amount of time XBRL - Why

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

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

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 the ASP/outsourcing environment. –How many routers did Cisco manufacture last year? Virtual closings. Enhanced insights and transparency. Quicker, Cheaper and faster decisions. XBRL - Why

The Growing XBRL Family

XBRL and Auditing; What Changes? XML provides the potential for additional information XBRL creates nothing new

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

Auditing XBRL Systems II. Mainframe Systems Software and Control - Operating System Concepts - Security Applications (ACF2, RACF) - Database Software (IMS, DB2) - Operations Software (Librarian, Schedulers, Change Control)

Auditing XBRL Systems III. Audit of the Systems Development Process - General Controls within System Development Process - Audits of Development Groups - Auditing Purchased Systems - Auditing In-house Development Systems - Linking SDLC Audits to Integrated Application Audits

Auditing XBRL Systems IV. Advanced General Control Audits - Mainframe Audit Program - Audit of the DBA Function - Audits of the Technical Support Areas V. Audit and Control of the LAN & Database Environment - Understanding Dbase Controls - Database Security - Database Backup and Control - Using Database Tools - LAN Administrative Issues

Auditing XBRL Systems VI. Audit's Role in Pre-Implementation Projects - Relating Pre-implementation Reviews to General Controls - Audit Methodology 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)

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

Is Auditing Different With XBRL? Special Needs –Care and feeding of Instance documents –Updating Taxonomies –Audit Scope Issues

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

XBRL: the business reporting supply chain and audit impacts Neal Hannon, Co-Chair XBRL Education Committee Bryant College XBRL Educational Resource Center