1. Internal Reporting Internal Controls Mike Willis, CPA Partner, PricewaterhouseCoopers, LLP Founding Chairman, XBRL International mike.willis@us.pwc.com XBRL Public Day General Ledger Track November 8, 2005

2. Discussion Topics  Standards; Interoperability & Controls  The Analogy  The Case Study  Common Data Problems  Impacted Process Areas:  Internal Reporting  Internal Controls/Validation/Analysis  Internal Controls Documentation & Analysis

3. Typical business objective “Increase production and throughput by leveraging the large warehouse engine. Tightly integrate critical business functions and align business processes to enhance flexibility, increase efficiency and productivity.” Does this sound familiar?

4. “Leveraging the warehouse engine”

5. From proprietary to infrastructure 1.Rail Road 2.Telegraph 3.Electricity 4.Telephone 5.Shipping 6.Product 7.Networking 8.Internet 9.Information A.RJ 11 B.40’ x 8.5’ x 8’ C.UPC D.HTML / SOAP / Web Services E.4’ 8.5” F.RJ 45 G.Rosettanet, MDDL, XBRL H.Morse Code I.120V, 50Hz Match the infrastructure to the standard Candy?

6. Corporate reporting supply chain Externa l Reporti ng Business Operations Interna l Report ing Investme nt, Lending, Regulati on Processes Economic Policyma king Participants Auditors Trading Partners Investors Financial Publishers and Data Aggregators Regulators Software Vendors Management Accountants Companies Central Banks XBRL Ledger XBRL External Reporting

7. Disparate Systems Air Conditioning Heating Water Heater Security Sound Electricity Lighting Cable Phone

8. Internet Interoperability drops operational costs Air Conditioning Heating Water Heater Security Sound Electricity Lighting Cable Phone 78 o 11:45am Intercom Lights Sound Other Interoperability drops operational costs

9. Lessons Learned  Manual processes are pervasive  Tools  Must be interoperable  Look Different  Enable greater range of capabilities  Business Rules applied across applications  Functions/Controls may occur at new locations  Control is greatly enhanced  Flexibility and Agility is enhanced  Compliance capabilities significantly improved  Operational costs are significantly reduced

10. More flexibility, fewer custom interfaces Definitions and Formulas Definitions and Formulas Reports Organization 1 Consumption and Analysis Organization 1 Consumption and Analysis Organization 2 Prepare and Validate Organization 2 Prepare and Validate Organization 3 Prepare and Validate Organization 3 Prepare and Validate

11. Common Data Problems  Data is replicated at the application level resulting in multiple versions of the truth.  Accounting elimination information is often manually obtained from the data sources below the consolidation application layer  Data validation processes are often conducted manually  Business rules are embedded within specific applications; either the consolidation application or the analysis application  Controls like business rules are embedded within specific applications or they are manually applied  Language labels are applied at the application level

12. Common Data Problems  Linkages of data to company policies is manual and/or application specific and in most cases inadequate  Data models are application specific  Data flows in one direction; audit trail is lost  Reporting (book, tax, management) is not reconcilable to each other  Communication is bottom up only  Investments are lost when systems change

13. External AND Internal Processes  Intermediaries exist in the market… but also within the company:  Internal locations  Disparate applications  Manual transfers  Automated transfers of disparate ledger concepts  Manual analysis and controls  Manual aggregations Inefficient aggregation Manual mapping and preparation

14. Internal Controls Documentation & Analysis  Process Documentation  Visual representations of processes  XBRL articulation of facts  Linkage of facts to related concepts (controls)  Assessment of facts for:  Missing concepts (controls)  Inefficiencies  Redundancies  Others

15. Internal Reporting Internal Controls Mike Willis, CPA Partner, PricewaterhouseCoopers, LLP Founding Chairman, XBRL International mike.willis@us.pwc.com XBRL Public Day General Ledger Track November 8, 2005

16. An XBRL reporting system will disseminate relevant information in a flexible, usable format to markets on an almost real-time basis… Too much damage has occurred to the U.S. economy and the capital markets because of the lack of timely and transparent financial information. I have confidence that XBRL will eliminate those deficiencies. The Hon. Richard H. Baker Chairman, House Capital Markets Subcommittee

17. Transaction data Multiple departmental Excel spreadsheets Consolidated spreadsheets for management 2000 elements= 6500 spreadsheets (this is not a typo) SQL Consolidation & Aggregation Processes Senior Management

18. Transactio n Data Multiple Departmental Excel Spreadsheets Consolidated spreadsheets for management SQL Current Consolidation & Aggregation Processes Senior Management

19. Subsidiary ERP’s Supplemental information aggregation Controls Control located with data or in supplemental manual processes Current Consolidation & Aggregation Processes Senior Management

20. Services architecture leveraging information standards Transaction and or subsidiary Data Senior Management Viewing and aggregation for department & management XBRL Web Services Controls ‘Wrap & Map’ XBRL GL