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® December 6, 2006 Makoto Koizumi INRPT07: Comprehensive Financial Data Modeling - FR, GL, and Internal Control Taxonomy.

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Presentation on theme: "® December 6, 2006 Makoto Koizumi INRPT07: Comprehensive Financial Data Modeling - FR, GL, and Internal Control Taxonomy."— Presentation transcript:

1 ® December 6, 2006 Makoto Koizumi INRPT07: Comprehensive Financial Data Modeling - FR, GL, and Internal Control Taxonomy -

2 Basic Concept (1/2) Corporate Financial Data Model Binding FR and GL Describe Business Process (IC) in XBRL Risks in business process Controls to mitigate the risks Binding GL and IC

3 Financial Statement (XBRL-FS) (Material Accounting Item) Ex: Total Asset (BS) Ex: Sales (PL) Ex: Profit before tax (PL) Financial Statement (XBRL-FS) (Material Accounting Item) Ex: Total Asset (BS) Ex: Sales (PL) Ex: Profit before tax (PL) General Ledged (XBRL-GL) (Legion): (Detail accounting item) Ex: Sales Head Office : Sales Accounting (Software) General Ledged (XBRL-GL) (Legion): (Detail accounting item) Ex: Sales Head Office : Sales Accounting (Software) Internal Control(XBRL-IC) Business Process: Sales Process Activity (1:n) Attribute(O,F,C) (1:n) Risk (1:n) Control Objective (1:1) Control Activity (1:n) Key Control (1:1) Test Effect/ Evaluation (1:n) Internal Control(XBRL-IC) Business Process: Sales Process Activity (1:n) Attribute(O,F,C) (1:n) Risk (1:n) Control Objective (1:1) Control Activity (1:n) Key Control (1:1) Test Effect/ Evaluation (1:n) IT General Control Business Process Management Organization Management Account Management Basic Concept (2/2)

4 The Merit of Internal Control Taxonomy Comprehensive corporate data model to provide; Risk management: to identify material weakness in internal controls and supports to plan + act accordingly with materiality of deficiencies. Business Process Management: based on materiality of business process with relation to financial reports. Possible management dashboard: for top management to understand areas of risks.

5 Integrity with financial information Flexibility and Extensibility Defines corporate-specific risks and controls using COSO template. Data management and workflow Facilitates information sharing regarding Internal Controls definition or evaluation among Business Process Owner, Internal Control Department, and external auditor. Why XBRL Taxonomy?

6 Binding FR-GL-IC (1/2) Instance Taxonomy Instance Taxonomy Instance Taxonomy Related accounts xbrlinfo sales Summary

7 Binding FR-GL-IC (2/2) Significant account Business Process Sales Sub Process Inbound Sub Process Operations Sub Process Process Account Receivable Location x Detail account Location x Detail account n n n

8 Document Internal Controls On Business Process Step 1 BPO Test Internal Controls And Report Step 2 Internal Auditor Evaluate Report And Plan Remediation Step 3 BPO Risk-Control evaluation workflow

9 Activity Related Accounts (multiple) Sub Activity Control Objective Control Objective Attribute Risk Operation Financial Reporting Compli- ance String Boolean String Boolean String Boolean String Boolean String Pre-defined section of Internal controls Risk-Control Evaluation Data Model (1/3)

10 ControlKey Control Assertion E/OCV/AR/OP/D StringBooleanNumeric StringBooleanNumeric StringBooleanNumeric StringBooleanNumeric StringBooleanNumeric StringBooleanNumeric StringBooleanNumeric Internal controls documentation Risk-Control Evaluation Data Model (2/3)

11 Test Results - ScoreTest Results - NarrativeRemediation Plan NumericString NumericString NumericString NumericString NumericString NumericString NumericString Test – Internal controls evaluationGAP remediation Risk-Control Evaluation Data Model (3/3)

12 Related Accounts Control Objectives Attribute Activity Control Objectives Risks Controls Control Activities Tests Test Results - Score Test Results - Narrative Remediation Plan Assertions Key Control Process tupleitem attribute coso:Process coso:SubActivity coso:ControlObjectives coso:Risk Substitution Group coso:Activity SubActivity COSO cartridge IC Taxonomy Data Model

13 1/Activity : INBOUND 2/Activity : OPERATIONS 3/Activity : OUTBOUND 4/Activity : MARKETING AND SALES 5/Activity : SERVICE 6/Activity : PROCUREMENT 7/Activity : TECHNOLOGY DEVELOPMENT 8/Activity : HUMAN RESOURCES 9/Activity : MANAGE THE ENTERPRISE 10/Activity : MANAGE EXTERNAL RELATIONS 11/Activity : PROVIDE ADMINISTRATIVE SERVICES 12/Activity : MANAGE INFORMATION TECHNOLOGY 13/Activity : MANAGE RISKS 14/Activity : MANAGE LEGAL AFFAIRS 15/Activity : PLAN 16/Activity : PROCESS ACCOUNTS PAYABLE 17/Activity : PROCESS ACCOUNTS RECEIVABLE 18/Activity : PROCESS FUNDS 19/Activity : PROCESS FIXED ASSETS 20/Activity : ANALYZE AND RECONCILE 21/Activity : PROCESS BENEFITS AND RETIREE INFORMATION 22/Activity : PROCESS PAYROLL 23/Activity : PROCESS TAX COMPLIANCE 24/Activity : PROCESS PRODUCT COSTS 25/Activity : PROVIDE FINANCIAL AND MANAGEMENT REPORTING COSO Taxonomy Internal Control Taxonomy - Company-A Sales Cost Accounting PurchaseFixed Asset SalaryR&D TaxationInvestment & Loan Financial Reporting COSO Cartridge

14 Pre-defined section of Internal controls String Boolean String Boolean String Boolean String Boolean String Compli- ance Financial Reporting Operation Risk Control Objective Attribute Control Objective Sub Activity Related Accounts (multiple) Activity Process taxonomy COSO frame taxonomy COSO Import COSO frame taxonomy where necessary Palette activities that compose Sub-process Taxonomy Development Approach (1/2)

15 Taxonomy Development Approach (2/2)

16 Internal Control Terms Elements (ctrl) Internal Control Terms Relationships (ctrl) COSO Framework Terms Elements (coso) Inbound Terms Elements (inbound) COSO Framework Terms Relationships (coso) Inbound Terms Relationships (inbound) Process Terms Relationships (proc) Process Terms Elements (proc) Company ExtensionTemplate Outbound Terms Elements (outbound) Outbound Terms Relationships (outbound) Concepts Relationships IC DTS Diagram - Overall

17 Internal Control Terms Elements (ctrl) Internal Control Terms Relationships (ctrl) COSO Framework Terms Elements (coso) COSO Framework Terms Relationships (coso) Process Terms Relationships (proc) Process Terms Elements (proc) Template Concepts Relationships IC DTS Diagram - Template

18 Internal Control Terms Elements (ctrl) Internal Control Terms Relationships (ctrl) COSO Framework Terms Elements (coso) Inbound Terms Elements (inbound) Inbound Terms Relationships (inbound) Process Terms Elements (proc) Company Extension Outbound Terms Elements (outbound) Outbound Terms Relationships (outbound) Concepts Relationships IC DTS Diagram – A Company

19 Top page to Financial Report FR to GL GL to IC Demo


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