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Discussant Gerald Trites, FCA, CA*CISA/IT
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1. Take the approach in the paper that the instance document is a fair representation of the original statements/documents; 2. Accept that the original financials have been audited and that the only change that has taken place is the mapping and tagging process and express an opinion on that process; 3. Audit the instance document on a standalone basis as the primary document.
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- Logically, the SEC might be interested in this assurance, but they can check much of it themselves - Investors are perhaps indirectly interested in whether the document reflects the original document, but are more likely to be interested in whether the information they wish to use is accurate and fairly presented.
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If users have access to the original opinion on the original document, which normally they would, then they can rely on that. If the tagging has been done correctly, then they should be able to rely on the final instance document. Therefore the only additional assurance required is on the tagging process.
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This approach would be similar to that followed in conventional audits. The tagging process would be just a part of the overall system used to produce the financials, no different than any other part of the system. In this context, the tagging process would likely incur little additional time beyond an audit of the original financials. Key controls would be identified, the risk of misstatement evaluated, and the audit procedures adapted to take into account the risks of material misstatement. In effect, the tagging process would be audited in the context of an audit of the whole.
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Determining materiality for the assertions stated in the study has no reference point. What is meant by Fair Representation? Mentioned in paper but not followed up
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If an audit of the instance document itself can be done taking the tagging process as an incremental aspect of the system, as under option 3, Why can not the same incremental approach be taken to auditing instance documents when they are not the primary document? i.e. determine the extent of testing that was used to report on the original document and then determine the additional testing required to enable an opinion on the instance document. Intuitively, the extent of additional testing should be smaller than under either option 1 or 2.
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The paper states that because the statements in XBRL can have lines extracted, we need to worry about specific item materiality. We have always had the same problem with conventional financial statements. It is just as easy to extract pieces out of them. We already have well established and accepted assurance standards for individual financial statement items. The basic principles of generally accepted auditing standards that the audit only applies to the statements as a whole are well established.
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Interesting paper Will be helpful for generating discussion Excellent job of identifying assertions and classifying them into a framework
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