1. XBRL: What’s In It For Internal Auditors Gianluca Garbellotto, Iphix June 25, 2009

2.  Why should internal auditors care  Where – and how – XBRL is used  Intro to XBRL Global Ledger  XBRL for internal use  What does it all mean for internal audit  Resources  Q&A

3.  XBRL is here … or coming fast  The primary concentration: regulatory filings  Drivers for adoption include ◦ Process efficiencies ◦ Information transparency ◦ Significant cost savings in data integration, dissemination and analysis  XBRL is more than filings, financials and compliance  The benefits above increase the deeper XBRL/data standardization is embedded

4.  Role in external filings ◦ Under a bolt-on approach ◦ Under an embedded approach  Internal transparency and efficiencies – today and tomorrow ◦ Statistical vs. 100% testing ◦ Centralized, consistent and application-independent validation, processing and visualization of data ◦ New collaboration model with external auditors ◦ M&A ◦ The spectre of “real time”

5. CountryOrganizationProgram USSECPhased-in mandatory filing JapanTokyo Stock Exchange National Tax Agency Bank of Japan Japan Financial Services Agency Registrant Financial Report Filing eTax National Tax Return Filing Filing of Financial Reports EDINET – Electronic Disclosures for Investors Network UKCompanies House HM Revenue and Customs Account Filings Company Tax Filings ChinaChina Securities Regulatory Commission Interactive Data Filing for Financial Statements KoreaFinancial Supervisory ServiceMandatory Filing SingaporeAccounting and Corporate Regulatory Authority - ACRA Mandatory Filing Israel, Spain, Italy and many more …

6.  On the basis of reduced compliance burden  Cross-government, business-to-government projects  Established in The Netherlands and Australia, official declarations of interest in New Zealand and UK, closely watched in many other countries  Based on long-term partnerships between Government and businesses – not on mandates  Not only - or even mainly - about financial statements  Significant cost savings for both sides  If your systems and processes are integrated, you may not have to report … until needed

7.  Quarterly data collection from US banks, started in 2005  Key point: validation at the source of data rather then at the consumption point  Substantial impact on processes, resources and costs ◦ Errors in data received 68% => 5% ◦ Processing time 45/60 days => 2 days ◦ Human resources 1,000 => 200

9. Processes Regulators and Administrators ExternalAuditorsExternalAuditorsInternalAuditorsInternalAuditorsManagementAccountantsManagementAccountantsTradingPartnersTradingPartners InvestorsInvestorsFinancialPublishers and Data AggregatorsFinancialPublishers Aggregators Software Vendors and Service Providers CompaniesCompaniesCentralBanksCentralBanks Business Reporting Supply Chain US GAAP IFRS SBR GRI G3 Statutory MD&A SCOA/Trial balance AP/AR Ledgers General Ledger Fixed Assets, Inventory Documents/Entries Parties, entities KPIs – financial and not Others Accounting Software ERP systems UBL Rosettanet ACORD MISMO FPML Others Crating the seamless interface External Business Reporting External Business Reporting Business Operations Business Operations Internal Business Reporting Internal Business Reporting Investment, Lending, Regulation Investment, Lending, Regulation Economic Policymaking Participants

10. Different Data Dictionaries: Field names, field order System 1: AccountNo, Amount, Date System 2: MonetaryAmount, PostDate, AccountNumber System 3: PostingDate, Account#, Value System 4: Date, Journal, Account, Amount Similar Data Account, Amount, Date Different Representations for the same concepts in common data field Journal: PJ, Payroll Journal, Payroll Date: 12-31-03, 20031231, 12/31/03 Different Data Formats CSV ASCII WKS How do ACL, IDEA, ETL and other tools span the gaps?

11.  System 1: AccountNo, Amount, Date  System 2: MonetaryAmount, PostDate, AccountNumber  System 3: PostingDate, Account#, Value  System 4: Date, Journal, Account, Amount  XBRL GL says: ◦ accountMainID ◦ amount ◦ postingDate ◦ sourceJournalID ◦ (and 400+ other data fields)

12. Joining Systems qbxmlqbxml smbxmlsmbxml Intacct xml SAPSAP PeoplesoftxmlPeoplesoftxml qbxmlqbxml smbxmlsmbxml SAPSAP PeoplesoftxmlPeoplesoftxml Oracle Oracle

13. Standards-based Data Interchange OracleOracle Industry transactional XML XBRL GL qbxmlqbxml smbxmlsmbxml Intacct xml SAPSAP PeoplesoftxmlPeoplesoftxml qbxmlqbxml smbxmlsmbxml SAPSAP PeoplesoftxmlPeoplesoftxml

14. AccountingSystemAccountingSystem Accounting System A Accounting Accounting System B Accounting Chart of Accounts Customers, Vendors, Employees Open AR, AP, Inventory Status Journal Entries, Ledger History AccountingSystemAccountingSystem CPACPA Trial Balance Adjustments Budget

15. Tax information Public Books Management Reporting Operational Systems Tax representation format Forensic representation format Consolidation Systems External Systems Operational formats Link to other standards Leverage other standards Harmonize other standards

16.  Facilitate the automated and seamless audit trail  Provide new transparency across systems  Designed especially to help capture reconciliations ◦ Book to tax (permanent, timing) ◦ US GAAP, local, IFRS

17.  Systems integration  Data access, assembly and overview  Data quality ◦ Validation at the “source” ◦ Consistency in data validation rules and analysis/visualization of data  Redefinition of spreadsheets as user interfaces not data storage/transformation facilities

18.  In all these areas, opportunities come from ◦ Elimination of one-way interfaces between systems ◦ Elimination of manual reconciliation processes at all levels of data integration/summarization ◦ Seamless traceability of any information to its source ◦ Reusability of consistent templates for visualization, validation, and analysis across applications/business units  No tight coupling between data, key processes related to data such as validation, reconciliation and analysis, and applications where the data is stored

19.  Migration from manual to automated processes in key activities  Ability to more efficiently access and integrate entity-wide data  Abstraction of business rules and controls that can be applied across a wide range of software applications  Lower cost operating environment

20.  Broader set of monitoring controls and assessments – ultimately enabling continuous auditing and monitoring  Connect resources to specific data concepts ◦ Relationships ◦ Labels ◦ References to authoritative guidance and internal policies ◦ Libraries of business rules, entities, assertions, risks, and controls

21.  Improving report review and assembly  Reducing spreadsheet proliferation  Reducing/eliminating manual controls  Eliminating manual data access across disparate information sources  Rationalizing disparate and redundant controls that are application-specific rather than purpose- specific

22.  Taxonomy related ◦ Use of an appropriate taxonomy ◦ Use of the appropriate version ◦ Corporate extensions  Data mapping related ◦ Consistency and completeness of the mapping process  Compliance with the XBRL Specification and with relevant best practices ◦ Taxonomy ◦ Instance documents

23.  Awareness and education on the real scope of XBRL  Evaluation of internal audit implications of the mandate and of other related reporting processes – for entities subject to the SEC or other mandate  Identify and prioritize areas that are logical candidates for the application of a standards-based approach ◦ Manual control processes where automation would bring the most significant benefits. ◦ Areas of priority for the application of rules-based compliance testing. ◦ Automation of persistent control assessments across disparate systems (e.g., payables controls)

24.  THEIIA white paper http://www.theiia.org/recent-iia- news/?search=xbrl&C=801&I=9119  XBRL International website http://xbrl.org/GLFiles  GaLaPaGoS – Global Ledger Practices Guide for Study http://gl.iphix.net  XBRL members resources [INT-GL]  Public XBRL GL mailing list http://groups.yahoo.com/group/xbrl-gl-public  Monthly XBRL column in IMA’s Strategic Finance magazine http://glg.iphix.net/?page_id=11

25. Gianluca Garbellotto President/CEO, Iphix XBRL Global Ledger WG Chair Email: gg@iphix.net Blog: http://glg.iphix.net