XBRL

Objective

Objective

The XBRL project takes a two-phased approach.

The objective of Phase 1 is to consult with key stakeholders to understand how XBRL is actually being used in different jurisdictions as it relates to the filing of an entity's financial statements and how the IAASB should address the public interest considerations when auditors are associated with XBRL data.

The objective of Phase 2 is to apply the findings of the consultation in developing a pronouncement:

  • To address the performance and reporting expectations of the auditor in connection with audited financial statements that are accompanied by XBRL data and,
  • If deemed necessary, to discuss the considerations relevant when audited financial statements are only filed in XBRl.

Background

The IAASB Strategy and Work Program, 2009-2011 indicates the IAASB will "in consultation with national standard setters and relevant XBRL groups, develop guidance for auditors on the approach to be followed when XBRL financial statements are to be filed together with the auditor's report."

In agreeing to this project as part of the Strategy and Work Program, 2009-2011, the IAASB accepted that there is a clear need for a discussion of auditor actions when XBRL data is filed with the audited financial statements. The following, however, was acknowledged in reaching this conclusion:

  • It is important that any standard or guidance to be developed is in response to a clear need; further research is needed as to how extensively and in what capacity XBRL is used around the world.
  • As the XBRL landscape evolves, it will be necessary for the IAASB to monitor developments with regard to XBRL to determine whether there is a demand for related assurance services beyond what is already provided in audit.
  • Any longer-term initiative is likely to be informed by responses to the exposure draft of the initial project dealing with XBRL, as well as ongoing consultation with national standard setters and relevant XBRL groups.

Task Force progress / Board discussions to date

The IAASB approved the project proposal at its March 2009 meeting.

The IAASB Consultative Advisory Group (CAG) also discussed the project proposal at its March 2009 meeting.

At its September 2009 meeting, the IAASB received a presentation on the topic, further discussed the proposed consultation approach, and considered how best to address the issue of auditor association with XBRL data. The IAASB agreed that targeted consultation by the Task Force is necessary before a broader public consultation. The IAASB discussed a proposed consultation plan and a draft of a Staff publication regarding the auditor association issue at its December 2009 meeting. A staff Q&A, entitled XBRL: The Emerging Landscape, was issued in January 2010.

At its June 2010 meeting, the IAASB received an update on planned consultations, and considered whether to develop in the immediate term guidance on performing agreed-upon procedures engagements on XBRL data. The IAASB noted the importance of taking a longer-term perspective on assurance needs on XBRL data, and that further input from stakeholders is necessary to making an informed decision on the appropriate course of action.

Subsequent to its June 2010 meeting, the IAASB Steering Committee agreed that the pace of work on the XBRL project should be slowed pending findings from research on user perceptions, and further developments in the environment that provide clear impetus and direction for how the project should be taken forward.

The IAASB recognizes that the environment regarding assurance on XBRL remains dynamic and fluid. In order to assist the IAASB in prioritizing its resources, adequate study of the developments, issues, challenges and market needs relating to XBRL and other areas (including integrated reporting, sustainability, corporate governance, and internal control) is needed to ensure the IAASB can develop informed and relevant responses as needed. Accordingly, the IAASB plans to establish a working group in 2013 to identify and research issues and actively monitor relevant developments for purposes of informing the IAASB’s thinking on these topics, referred to as the Innovation, Needs and Future Opportunities (INFO) Working Group. The working group will report periodically to the IAASB in order to shape its longer-term strategic direction. It may recommend specific work streams for the IAASB to pursue, avenues of cooperation with interested stakeholders, how best to gather input at earlier stages of any potential project to develop standards in these areas, and whether to develop discussion papers or thought pieces. It may also develop reports on findings that may be shared with NSS, regulators, firms and other organizations with a view to stimulating debate and collaboration.

 

As a result, the specific project on XBRL originally contemplated in the project proposal will be supplanted by the broader considerations of the INFO Working Group, which will monitor the relevant developments and make recommendations to the IAASB on the way forward.

Next Steps

Any further action on XBRL will be considered as part of the INFO Working Group.