Considerations and areas of judgment for accounting professionals

CONSIDERATIONS FOR ACCOUNTING PROFESSIONALS WISHING TO PERFORM XBRL-SPECIFIC ASSURANCE SERVICES

Hang Miao

BRIEF INTRODUCTION TO XBRL

eXtensible Business Reporting Language

Computing language designed to improve quality of financial reporting by: Eliminating manual keying Making financial statements between

companies more comparable

BRIEF INTRODUCTION TO XBRL (CONT’D)Example:

Consider the following piece of financial information:

Assets held For Sale € 100,000

In XBRL, this information would be represented as:

<ifrs-gp: AssetsHeldSale ontextRef=”Current_AsOf” unitRef=”U-Euros” decimals=”0”> 100000 </ifrs-gp:AssetsHeldSale>

Source: http://www.xbrl.org/Example1/

BRIEF INTRODUCTION TO XBRL (CONT’D) XBRL financial statements are created

by tagging financial statement data with elements from an XBRL taxonomy

An XBRL taxonomy is a dictionary of the XBRL tags.

<ifrs-gp: AssetsHeldSale contextRef=”Current_AsOf” unitRef=”U-Euros” decimals=”0”>100000</ifrs-gp:AssetsHeldSale>

Financial statement

s

XBRL taxonomy

XBRL documen

t (Instance

)

Users

Source: http://www.informationbuilders.com/images/products/webfocus/enlarge/enl_xbrl-fml.jpg

WHAT SERVICES CAN AN ACCOUNTANT PROVIDE WITH RESPECT TO XBRL?

XBRL was not designed with information integrity in mind

Possible problems with XBRL include: Improper use of taxonomic elements Improper use of custom elements XBRL document does not match original

financial statements

CAN PROFESSIONAL ACCOUNTANTS PROVIDE XBRL SERVICES?

Assurance is currently not required for XBRL documents

As with any other assurance engagement, the accountant must be independent

See AICPA SOP 09-1 for list of engagement conditions

CHOOSING BETWEEN AN ATTESTATION REPORT AND SPECIFIED PROCEDURES REPORT Two types of reports can be issued:1. Attestation Report (US: AT 101, Can:

HB 5025)2. Specified Procedures Report (US: AT

201, Can: HB 5025) Choice depends on user needs Specified procedures report requires

input from users

SKILLS/EXPERTISE REQUIRED

Knowledge of regulatory environment (e.g. SEC filing rules in the US)

Knowledge of IT and XBRL Ability to use XBRL reading and

manipulation programs

FUTURE DEVELOPMENTS

More guidance – AICPA Exposure Draft Increased size and complexity of XBRL

filings Increased user sophistication with

respect to XBRL

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