Xbrl Assurance

Topics: XBRL, Financial statements, Balance sheet Pages: 9 (3027 words) Published: April 14, 2013
Assurance of XBRL

* Extensible Business Reporting Language (XBRL) is a new technology with the purpose to aid in the creation of financial statements and reports. It is meant to make financial reports be intrinsically accurate, contextually sound, easily accessible to users of financial data, and representational of true financial data of companies. The assurance of XBRL is of major concern in the accounting industry at this time. Organizations have come together for the development of XBRL and the improvement of auditing this technology because of its complexity and impact on financial information that is published to users. The following paper describes what XBRL is and explains the basic components of this technology. An analysis of the issues surrounding implementation and auditing of this mark-up language, as well as the benefits that can exist, is discussed. *

* What is XBRL?
* According to XBRL.org, the official website for XBRL International, “XBRL is a member of the family of languages based on XML, or Extensible Markup Language, which is a standard for the electronic exchange of data between businesses and on the internet.  Under XML, identifying tags are applied to items of data so that they can be processed efficiently by computer software.” XBRL is simply a language that computer systems can understand to create detailed financial reports. It is specifically designed to not only publish financial data but also to share this data with users. To understand how XBRL works, the definition of XBRL taxonomy and its components is necessary. * The XBRL taxonomies are used to specify the data that is included in specific reports or exchanges. There are many XBRL taxonomies that have been created by the XBRL Standards Committee. An organization that is reporting its financials would tag specific general ledger accounts to the appropriate XBRL taxonomy elements. Mapping the company’s internal data to XBRL taxonomy elements makes it possible to provide users of financial data, expanded financial information more frequently and instantly. Mapping makes this easy because it only needs to be done once. (Hall, James A. Information Technology Auditing, pgs. 271-272) The end product of the use of XBRL taxonomies and input of financial data is an instance document which is essentially the tagged version of the financial statements. These financial statements can have extensions to the standard taxonomies used and extensions to customized taxonomies that the particular organization feel better represents its financials. * One component is the XBRL schema. “An XBRL schema stores information about taxonomy elements and their associated attributes.” (XBRL Capabilities and Limitations: Certified Public Accountants, The CPA Journal 77.12) An example of a balance sheet item would be the “Cash” item. The schema would define “Cash” an element that has a monetary value at a point in time, and is identified as “Cash.” Cash would be described to have a value at a point in time by being defined as an instant element because the balance sheet represents the values of assets, liabilities, and owner’s equity on a specific date. If on the other hand the schema was to define an item on the income statement, the item would be identified as a duration element because an income statement reports for a period of time. Schemas identify individual elements, but the relationships of multiple elements are made possible through linkbases. * Linkbases are another component of XBRL taxonomies. The five different linkbases include: presentation linkbase, calculation linkbase, definition linkbase, reference linkbase, and label linkbase. Each linkbase has its own function to relate elements to one another. * The presentation linkbase helps to organize the content of the taxonomy. Hierarchical relationships are established between elements so as to present data in a complete and comprehensive manner. * The...
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