TECHNOLOGY

XBBy Kristine Brands,R CMA L

XBRL and the Data Standards

As the end of 2013 approaches, What Are the Audit . Currently there are three calendar-year-end companies are get - Data Standards? parts to the first publication—the Base ting ready for their year-end closes The Emerging Assurance Technologies Standard, the General Stan - and annual . When I was a cor - Task Force of the AICPA Assurance dard, and the porate controller, the first quarter of Services Executive Committee (ASEC) Standard—and there are plans to add the new year was a blur as I bal - was formed to examine how to use more ADSs for other subledgers, such anced my day job with being at the technologies to improve the effective - as , , fixed beck and call of the auditors. Their ness, timeliness, and efficiency of the , and payroll, and for industry requests for data and information audit process. The Audit Data working sectors and processes. seemed endless, which made me feel group was created to develop the The Base Standard provides a data like I was answering the same ADSs, voluntary standards that specification model for setting up the requests over and over again. And improve this process in the area of information files. This includes file these information requests seemed gathering and sharing information naming and file formats. Two file for - to drag on for weeks. For those of between the audit client and the audi - mats are recommended: XBRL, using you who have had similar experi - tors by leveraging technology. These the global ledger taxonomy (XBRL-GL), ences, imagine gathering audit infor - aren’t authoritative auditing standards, or a flat file (pipe delimited format) mation requests in a few minutes so companies aren’t required to follow that follows UTF-8 text file format. instead of several weeks. The recently them. But their concept is simple: XBRL-GL is a recognized international released Audit Data Standards (ADSs) organize a company’s financial data standard that many enterprise resource from the American Institute of Certi - into a standardized electronic format planning (ERP) vendors follow. It allows fied Public Accountants (AICPA) can that can be shared with the auditors. companies to embed XBRL tags in their make that happen by leveraging Instead of answering hundreds of and ERP systems and technology like eXtensible Business information requests during the features data validation. The UTF-8 for - Reporting Language (XBRL) to course of the audit, you can provide mat is widely supported by software streamline the gathering of audit the data at the beginning of the audit vendors, and files created in this for - data. Here we’ll examine how this by transmitting it to the auditors elec - mat are specific to a company. Regard - voluntary audit standard can help tronically. The features of the ADSs less of the format selected, a company revolutionize the financial audit can also support financial information maps the data into files and submits it process and significantly lessen a requirements for financial and internal to their auditors. company’s audit work burden. auditors as well as The General Ledger Standard

56 STRATEGIC FINANCE I December 2013 ding XBRL tags to GL data, they should evaluate adopting it for their general ledger ERP systems.

The Benefits Companies adopting the ADSs can streamline and improve their audit process. Regardless of the file format, financial information can be accessed quickly and shared with auditors, who then can develop programs to audit and analyze the information. Hewlett-Packard piloted the stan - specifically addresses data that applies ADS Adoption dards and collected the data in 10 to to general ledger accounts, and the considering adopting 15 minutes instead of two weeks Accounts Receivable Standard focuses the ADSs need to create a project using its current process. Needless to on accounts receivable accounts. For team composed of and IT say, the time and of the example, the General Ledger Standard personnel and their auditors to define audit on the client’s side and the provides file formats for the GL detail, their data collection objectives. As part auditor’s side will drop, freeing up the , the chart of of the adoption process, the project both to focus on “what’s inside the accounts, and the source listing. All team must select the data file format numbers” rather than the tedious three standards include a question - as well as the information that will be task of collecting data. And that naire to be completed by the IT and collected. Then the needs should improve audit quality. SF business side of the organization to to map the audit information require - evaluate the data that will populate ments to its data and extract the Kristine Brands, CMA, is an assistant C S

I the data files. Data validation guid - information from its current system to professor at Regis University in D T R

A ance is provided for the General create the data files. Because many Colorado Springs, Colo., and is a

: N O I Ledger and Accounts Receivable companies probably haven’t imple - member of IMA’s Pikes Peak T A R

T standards, a key element of the mented XBRL-GL, the XBRL standard Chapter. You can reach her at S U L L I ADSs. that simplifies the process by embed - [email protected] .

December 2013 I STRATEGIC FINANCE 57