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IAASB’s Project on XBRL. Kathleen Healy, Senior Technical Manager. XBRL International Conference. Rome, Italy. April 21, 2010. About the IAASB. Overview of the IAASB. Mission – To serve the public interest by:

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IAASB’s Project on XBRL

Kathleen Healy, Senior Technical Manager

XBRL International Conference

Rome, Italy

April 21, 2010

About the iaasb
About the IAASB

Overview of the IAASB

  • Mission – To serve the public interest by:

    • Setting high-quality international standards on auditing, assurance and related services, and on quality control; and

    • Facilitating international convergence with those standards

  • Independent standard-setting board that develops and issues International Standards on its own authority

  • Public oversight of its due process by the Public Interest Oversight Board

About the IAASB

Overview of the IAASB – cont.

  • Wide international representation through volunteer members from around the world

  • Stakeholder input from the IAASB Consultative Advisory Group – investors, preparers, regulators, users

  • International Standards on:

    • Auditing (ISAs); other assurance engagements; related services

    • Quality Control (ISQC 1)

Clarified isas
Clarified ISAs

The Clarity Project

  • Completed March 2009; Clarity ISAs are now effective

    • For periods beginning on or after 15 Dec 2009

  • Purpose of enhancing quality and uniformity of practice

    • Clarity and understandability of the standards, capable of consistent application

  • New drafting conventions applied: new structure describing practitioner’s obligations

  • Suite of 36 ISAs and ISQC 1

    • Revision of approx. half of the suite of ISAs

Clarified ISAs

Global Acceptance of ISAs

  • 125+ countries adopt or use ISAs

    • IFAC online tool, Adoption Chart

  • 23/25 world’s capital markets, use for foreign issuers

  • IOSCO supports use in cross-border capital raisings

  • Recognition: World Bank, Basel Committee, World Federation of Exchanges, Financial Stability Board, INTOSAI

  • Top 22 global auditing networks’ methodologies align (Forum of Firms)


Overview of the IAASB’s Project on XBRL

  • Project approved March 2009

  • To consider whether a standard or guidance is needed:

    • Whether procedures on XBRL should be part of the financial statement audit?

    • Whether a need for assurance on XBRL-tagged data or the process to create it exists?

    • How might XBRL change the audit?


Overview of the IAASB’s Project (cont.)

  • Use of XBRL largely driven by regulatory requirements and varies by jurisdiction

  • Regulators not requiring assurance on XBRL-tagged data, but will they?

  • Consultation needed to determine the appropriate way forward

    • To ensure what may be developed responds to a global need and is in the public interest


Staff Q&A on XBRL – Issued January 2010

  • Provides educational material on XBRL

  • Clarifies that the ISAs do not require auditors to perform procedures or provide assurance on XBRL-tagged data in the context of audited financial statements

  • Highlights services practitioners may be asked to provide

  • Outlines IAASB’s planned consultations


IAASB’s Consultation Process on XBRL

  • Targeting groups and jurisdictions moving in earnest with XBRL with relevant experience

    • XBRL International’s Assurance Committee

    • Regulators, treasury departments and tax authorities, accounting firms

    • IFAC Member Bodies and regional accounting associations – AICPA, FEE, ICAEW, national standard setters

    • Preparers, investors and users


Key Areas of Focus in the Consultation

  • How XBRL is used in particular jurisdictions

    • Who are the “users” of XBRL information and what do they expect in terms of assurance

  • Whether it is the public interest for auditors to perform some level of procedures in all audits

    • If yes, nature and extent of procedures

    • If no, how can the auditor’s association be better communicated


Key Areas of Focus in the Consultation (cont.)

  • If assurance is required or requested – process or data?

  • How do concepts like materiality and “true and fair view” apply in the case of XBRL?

  • How preparers are being educated and coping with requirements to use XBRL

  • Outsourcing and reliance on software solutions

  • Requests for practitioners to deliver services


Possible Services Relating to XBRL

  • Agreed-upon procedures to address accuracy, completeness or consistency of XBRL-tagged data

  • Examinations of the accuracy of XBRL-tagged data

  • Assurance on the controls related to the XBRL-tagging process

  • Advice on the XBRL implementation process

  • Preparation of the XBRL-tagged data (where not prohibited by relevant independence requirements)


Developments in the UK and Europe

  • iXBRL introduced by HMRC (tax authorities) as the required format for financial statements

  • Affects tax returns due after 31 March 2011

  • No requirement for public disclosure

  • ICAEW XBRL Assurance Working Group

  • Working to assist companies, auditors, regulators and others adapt to the changing environment

  • Guidance on agreed-upon procedures first step


Developments in the UK and Europe (cont.)

  • FEE Policy Position on XBRL and Roundtable

  • Promoting awareness about XBRL

  • Encouraging further education and training for preparers and auditors

    • Tagging requires knowledge of IT, familiarity with taxonomies, and an understanding of the financial reporting framework

  • Dialogue with European Commission and Committee of European Securities Regulators


Research Initiatives and Other Surveys

  • Research on XBRL echoes key issues

  • CFA Institute surveys show increased preparer awareness of XBRL and question of assurance

  • ACCA surveys show need to educate auditors

  • IAAER / ACCA funded research – The Implications of XBRL for the Financial Statement Audit

  • Debreceny, Farewell, and Verkruijsse

For more information, visit


Kathleen Healy

Staff Support for the IAASB XBRL Task Force