Assurance & XBRL: Status Update XBRL-US Conference Washington, DC 19 July, 2005

2 Agenda What is the Need? What is the AICPA doing? Where are we now?

3 Scope of Today’s Discussion XII Assurance Working Group Presentations to the IAASB, IFAC AICPA’s Special Work Group on Assurance & XBRL

4 Agenda What is the Need? What is the AICPA doing? Where are we now?

5 The need Yellow Pages XBRL is to the “printed” annual report, what the internet is to the printed Yellow Pages. “It must be true, I saw it on the Internet”

6 What about Assurance? “A general perception is that the ability to provide third-party assurance is required for instance documents to be accepted in the marketplace.” Stephanie Farewell and Robert Pinsker, The CPA Journal Online, May 2005

7 What about Assurance? “ When the auditors show up to offer their opinion as to whether your financials fairly represent the state of your company, which form of financials do they offer their opinion on? The XBRL? Or some kind of printed version?.” Bill Zoellick at April 27, 2005, Gilbane Report Blog

8 The Need In April 2005 the SEC began it’s Voluntary Filing Program (VFP). –Companies may elect to furnish XBRL versions of their 10K and 10Q filings, in XBRL format. –XBRL-Related Documents do not replace existing filing requirements. –Volunteers are required to continue to file their official EDGAR filings.

9 What is the SEC’s Voluntary Filing Program? Some rules: –The XBRL-Related Documents must be described as either “unaudited” or, for quarterly financial statements, “unreviewed.” –Volunteers are required to provide cautionary language advising investors that the purpose of furnishing XBRL data is to test the format and the technology and, as a result, investors should not rely on the XBRL data in making investment decisions. –Volunteers must reference the official filing from which the data in the XBRL-Related Documents was derived.

10 Agenda What is the Need? What is the AICPA doing? Where are we now?

11 AICPA’s Special WG on Assurance and XBRL Objective: to develop Practitioner’s Guidance: The objective is to provide detailed practitioners guidance for auditors, focused on PCAOB attest standard AT101, providing sample: audit plans work papers client documents

12 AICPA’s Special WG on Assurance and XBRL History of the Special WG: The AICPA Special WG on Assurance and XBRL began in The primary output was the precursor to what became the Q&A provided from the PCAOB.

13 AICPA’s Special WG on Assurance and XBRL What –January 2005: re-convened the Special working group on assurance and XBRL –Joint WG with: Deloitte E&Y Grant Thornton J H Cohn KPMG PwC –Scope limited to providing assurance within the scope of the PCAOB’s AT101 Q&A.

14 AICPA’s Special WG on Assurance and XBRL The Plan –Educate the Professional Standards people within the firms, “What is XBRL?” –Develop a mock audit plan (“Examination Plan”) –Execute the mock audit plan –Learn & provide feedback, to the industry, and to XBRL –Publish practitioner guidance: Sample work programs, etc

15 Some issues? Some of the issues that have been raised in the process: –An assumption that the same firm audited the underlying financials –Compliance / conformance with taxonomy –Auditor report in XBRL filing –Requirement to “reflect the same information” –External to AT101 (digital signatures, etc)

16 Agenda What is the Need? What is the AICPA doing? Where are we now?

17 Current Status? Profession standards people trained Mock audit-programs written and discussed within the WG Mock audit-planning completed Mock Audit of an XBRL VFP Filing is under way, with participate from: –“Big 4” –Grant Thornton –J H Cohn

18 Current Status? Objective is to publish guidance by the end of September 2005 –Sample Examination (audit) plans –Sample work-papers –Sample client-side documentation

19 The need Yellow Pages XBRL is to the “printed” annual report, what the internet is to the printed Yellow Pages. “It must be true, I saw it on the Internet” “It must be true, I got it from a trusted source on the Internet”