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1 Past, Current and Future Auditor Involvement with SEC Registrant's XBRL Exhibits Paul Penler – Ernst & Young LLP The 6 th Univ. of Kansas International.

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Presentation on theme: "1 Past, Current and Future Auditor Involvement with SEC Registrant's XBRL Exhibits Paul Penler – Ernst & Young LLP The 6 th Univ. of Kansas International."— Presentation transcript:

1 1 Past, Current and Future Auditor Involvement with SEC Registrant's XBRL Exhibits Paul Penler – Ernst & Young LLP The 6 th Univ. of Kansas International Conference on XBRL

2 Auditor’s areas of involvement AUPs and F&R engagements Other services for audit and non-audit clients Utilizing the XBRL data on financial audits 2

3 AUP and F&R engagements

4 AUP engagements-overview Auditors are not required (or expected) to:  Read, perform procedures, assess, or issue separate assurance on the XBRL exhibit or controls Agreed-upon procedures (AUP) engagements are separate from the audit and are less in scope than an audit or review – no assurance is provided.  The objective is to perform procedures in order for management to evaluate the completeness, accuracy and consistency of the XBRL data  Findings represents errors, alternatives, observations and recommendations Procedures can be customized, but usually focus on:  Tagging selection – use of the taxonomy and extensions  Areas the SEC has identified as frequently having errors (e.g. signs, decimals, date contexts, etc)  Company should evaluate whether findings would improve the XBRL submission and make final judgment related to potential changes Level of effort:  Typical block text engagement takes 2–3 elapsed weeks and ranges from 50–90hours  Typical initial detail tagging engagements takes 4–5 elapsed weeks and ranges from 150–250 hours  Reoccurring engagements take considerably less time Volume of findings:  Typical detail tagging engagement averages more than 150 comments, with companies making changes on most of the commented areas 4

5 AUP engagements - common errors observed Not tagging all required information  Parenthetical information, amounts in superscript footnotes, amounts written out (e.g., twenty percent), not tagging all amounts in the notes/schedules (detail tagging)  Line items that have a non-determinable value (e.g., commitments and contingencies)  Missing required S-X schedules, not including all required levels  Not tagging all of the dimensions (e.g., missing dimensions represented in narrative) Tag selection  Extending tags unnecessarily or selecting the wrong standard tag  Not using required tags or selecting different tags for the same amount and concept that appear more than one time in the financial statements Other tag related errors  Wrong signs for the values (i.e., positive versus negative), wrong reporting period dates, wrong decimal settings or wrong amounts (i.e., proper number of zeros),  Wrong or missing calculations, wrong or missing units of measure  Incomplete information provided for extensions tags (e.g., missing debit or credit balances, as required)  Not using XBRL footnote links, as required 5

6 AUP XBRL demand

7 Other services for audit and non-audit clients

8 Non AUP/F&R services Examinations Supporting development of creation processes and controls Supporting development of XBRL consumption Financial system implementation support Other 8

9 Utilizing the XBRL data on financial audits

10 Possible areas of usage by auditors Non Industry  Automatically updating analysis with each draft financials or when a number changes  Uses during quarterly work or Reporting/Conclusion,  Uses throughout each phase of the audit Industry  Identify sig. accts; Rev/Exp PSP; peer/industry data w/sig. accts  Extensive use of comparative face f/s info  Moderate use of comparative F/S Note info  Benefit scanning competitor/industry notes or supplemental schedules for terms, numbers, relationships Limitations  Timing/approach of company’s XBRL preparation  All text is not tagged at lowest level (e.g., tagging of text optional)  Data Quality

11 It’s all about data quality Initial filers - 10% Face – Quality & consistency MixedBetterGood Face – Company to company comparability Low MixedBetterGood Detail Notes – Quality & consistency LowMixedBetterGood Detail Notes – Company to company comparability Low Mixed Better Additional large accelerated filers - 20% Face – Quality & consistency MixedBetterGood Face – Company to company comparability Low MixedBetterGood Detail Notes – Quality & consistency LowMixedBetterGood Detail Notes – Company to company comparability Low Mixed Remaining filers -70% Face – Quality & consistency MixedBetterGood Face – Company to company comparability Low MixedBetterGood Detail Notes – Quality & consistency LowMixedBetterGood Detail Notes – Company to company comparability Low Mixed When will quality XBRL data be easily accessible? One perspective in August 2009


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