Continuous Reporting & Auditing Software Products

1. Continuous Reporting & Auditing Software Products Charles Hoffman, CPA XBRL Solutions, Inc.

2. My Background • Business school, accounting degree • Previously auditor with Price Waterhouse • Financial officer for 15 years • Accounting software consultant • Dreamed up this XBRL thing and started the process

3. Perspective “In times of change learners inherit the earth, while the learned find themselves beautifully equipped to work in a world that no longer exists.”Eric Hoffer

4. Objectives • Communicate some concepts • Provide information relating to tools XBRL Solutions, Inc. is building

5. Concepts • Everyone connected, high bandwidth • XML/XBRL everywhere • Intelligent Agents: authority and autonomy • World Class Manufacturing

6. Everyone connected, high bandwidth • Done deal • Five years or less • Intense competition driving this

7. XBRL/XBRL Everywhere • Cisco already has the “daily close” • FDIC wants to have real time bank examinations • Company wants to have electronic reporting of 300 mutual funds, rather than paper-based to save money • NCCS wants to stop keying in data for 250,000 organizations at a cost of $5,000,000 per year • Company wants to consolidate 300 different subsidiaries on 100 different accounting systems • What do you want to do better, cheaper or faster?

8. Now – a majority of cost relates to data discovery and re-keying Data Data Discovery Mechanics (Re-keying data) Analysis With XBRL – cost can be redirected to analysis Data D.D. Mechanics Analysis With XBRL, Intelligent Agents – total costs are reduced, analysis enhanced Data Analysis D M Intelligent Agents *Bars represent component cost, total bar length represents total costs

9. World Class Manufacturing • JIT (Just in time) – problem diagnosis and problem solving as a way of life • TQC (Total quality control) – do it right the first time • TPM (Total preventative maintenance) – preventative maintenance done daily • Reduced setup time, preferably zero • Reduced lead time, preferably none • Reduced batch sizes, preferably one • Pull-based manufacturing, rather than push-based

10. Tools

11. Credit Application Banks Text + Text EDGAR (Text) 10-K + Regulatory Filings Text GL Report Statements in Print Report + + Report + + Statement in PDF + C of A + Statement on Web Text Auditor Operational Data Stores Internal to entity External (Investors, creditors, regulators, etc)

12. 10-K Financial Statement Web Site Data Process Result Overview of Process Electronic audit “working papers”, electronic “audit wizards”, electronic “analysis wizards” Financial Statement Creation “expert system” Electronic, scriptable “closing book” Data extraction software Operational Data Stores

13. Data Extraction • ODBC • Data Junction • ACL (Audit Control Language)

14. Audit Wizard

15. Closing Book

16. Financial Reporting Expert System

17. Questions?