Assurance on XBRL for Financial Reporting

27 Pages Posted: 9 Mar 2008  

David Plumlee

University of Utah - David Eccles School of Business

Marlene Plumlee

University of Utah - School of Accounting

Date Written: February 1, 2008

Abstract

Tagging financial information using eXtensible Business Reporting Language (XBRL) creates documents that are computer readable and searchable. Since 2004, the Securities and Exchange Commission (SEC) has taken steps toward requiring XBRL to be used in its filings, including a voluntary filing program. Once XBRL is required, investors are likely to demand assurance on the tagging process. The PCAOB has issued guidance on attest engagements regarding XBRL financial information furnished under the SEC's current voluntary filer program, which relies on the auditor agreeing a paper version of the XBRL-related documents to the information in the official EDGAR filing. While this process may be adequate for the current paper-oriented reporting paradigm, the power of XBRL is that it allows individual pieces of financial data to be extracted from the SEC's financial database outside the context of the statements as a whole. This article provides some background on the SEC's efforts to incorporate XBRL into its filing process and a brief overview of the technical aspects of XBRL. Its principal focus is on several important questions that assurance guidance must address in a data centric reporting environment, such as, what constitutes an error or what does materiality mean when individual pieces of financial data will be used outside the context of the financial statements? It also describes some XBRL-related areas where academic research can and should provide inputs to the process of developing guidance for XBRL-document assurance.

Keywords: XBRL, Assurance, Assurance Standards

JEL Classification: G38, M41, M49

Suggested Citation

Plumlee, David and Plumlee, Marlene, Assurance on XBRL for Financial Reporting (February 1, 2008). Available at SSRN: https://ssrn.com/abstract=1104245 or http://dx.doi.org/10.2139/ssrn.1104245

David Plumlee (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

Marlene A. Plumlee

University of Utah - School of Accounting ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

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