McGraw-Hill/Irwin © 2013 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 9 XBRL

9-2 Outline Expected outcomes Purpose and nature of XBRL Terminology Benefits Risks and internal controls Tagging

9-3 Expected outcomes Define the following terms as they relate to XBRL: extensible, specification, taxonomy, namespace, instance document. Explain the history and structure of XBRL. Discuss ways XBRL can benefit organizations. Identify software tools for creating XBRL-tagged documents. Discuss internal control issues for XBRL.

9-4 Purpose and nature of XBRL XBRL is a tool for tagging (labeling) financial data. It provides context for those data; i.e., allows them to be interpreted more easily. Important ideas –Open source –Software & hardware independent –Not a new set of GAAP –Required for SEC filings –Can be expanded / extended by virtually anyone

9-5 Purpose and nature of XBRL XBRL International –Not-for-profit consortium of over 600 organizations worldwide –Builds XBRL language –Promotes & supports its adoption

9-6 Terminology Extensible XBRL will never be “finished.” It can be extended, within certain guidelines, through the creation of new tags. Specification XBRL is part of a larger family of tagging languages known as XML (extensible markup language). Thus, XBRL is a specification of XML.

9-7 Terminology Taxonomy The basic organizational unit of the XBRL language. Taxonomies are sets of tags such as those shown on the right. –US GAAP taxonomy 2009 –CL China Listed taxonomy –Global Ledger taxonomy –IFRS General Purpose taxonomy 2008

9-8 Terminology Namespace The Internet address (URL) where an XBRL taxonomy “lives.” Namespaces must be declared at the beginning of an XBRL document so computers know where to go to find the meaning of tags.

9-9 Terminology Instance document A document, such as a balance sheet, properly formatted with XBRL tags. In the SEC’s EDGAR database, instance documents are labeled “interactive data.”

9-10 Terminology Microsoft’s income statement from its 10-Q. This document was generated from an XBRL instance document.

9-11 Terminology Here is part of the XBRL code from Microsoft’s instance document.

9-12 Terminology Lecture break 9-1 –Point your web browser to the XBRL web site. –Click “taxonomy information” on the left. –Click “XII Recognized Taxonomies.” –Based on the information there, what is the difference between an “approved” and an “acknowledged” taxonomy?

9-13 Benefits More efficient data collection and reporting –Reduced cost –Faster, more reliable consolidations –Simpler regulatory reporting Facilitates data consumption and analysis –More time for value- added tasks –Quicker, more efficient decisions –Better communication with banks, regulators and other stakeholders

9-14 Risks and internal controls Error issues –Incorrect tagging –Inappropriate taxonomy Control issues Authorizations for: –Tagging –Taxonomy selection Auditing issues –Document validation –Client processes associated with XBRL “Using XBRL: Audit and Control Implications” by G. Gray. IT Audit, 10 August 2007.Using XBRL: Audit and Control Implications

9-15 Risks and internal controls Lecture break 9-2 Consider the risks on the previous slide. Suggest at least one internal control for each risk. Is the control you suggested preventive / detective / corrective in nature?

9-16 Tagging Nearly all tagging is automated. Tagging software often functions as an “add-on” to some other software, such as Excel or Peachtree. Packages include: –Ez-XBRL –Crossfire (Rivet Software) –UB Matrix List of other XBRL tagging software from XBRL InternationalList of other XBRL tagging software from XBRL International For more information and links, check out the XBRL post on Dr. Hurt’s AIS blog.Dr. Hurt’s AIS blog

9-17 Classroom assessment This chapter has focused on the eXtensible Business Reporting Language. On your own, write down two questions you have about XBRL. Work with a partner to consolidate your lists. Work with another pair (group of four) to make one master list.

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