The Auditing Practices Board (APB) of the Financial Reporting Council (FRC) has published a useful set of guidelines for auditors, XBRL Tagging of Information in Audited Financial Statements – Guidance for Auditors, which also functions as a good introduction to certain aspects of the use of iXBRL in the UK.The purpose of the guidance is to point out that some non-audit activities relating to the use of XBRL-tagging of financial statements may constitute what the APB calls either a management threat or a self-review threat. Currently, in the U.K. at least, this is not an issue:
The HMRC requirement does not include a requirement for the auditor to provide assurance on the XBRL tagging of the information submitted. Indeed many of the companies that will be required to submit iXBRL financial statements will be below the audit exemption threshold and will not be subject to an audit.
But as the APB point out:
It is also possible that regulators may require auditors to provide assurance on XBRL-tagged data at some stage in the future.
and…
In the longer term, if XBRL becomes integrated into accounting systems it may be difficult to separate XBRL tagging from accounting services.
What this means for Audit 2.0 firms is that XBRL taxonomy experts will be required as part of audit teams and that a new layer of functionality will be needed in accounting/auditing software. The foundation ‘XBRL layer’ currently required in most accounting software is to integrate tagging and taxonomy lookup capabilities. The second layer to extract and analyze the tags that have been used for audit and compliance purposes.
Share your thoughts: http://blog.rivetsoftware.com/2010/02/02/audit-threats/
