XBRL and Internal Control

Guest post by Didem Komaromi.

In a nutshell, XBRL (Extensible Business Reporting Language) is the language of finance accounting. The goal of XBRL is to make the analysis and exchange of corporate information more reliable.

The importance of internal control in organizations has become even more visible after Sarbanes-Oxley.  Management is now more aware of weak areas of their internal control and they want to improve efficiency and reduce associated costs with it.  According to many experts, XBRL can be used exactly for this purpose.  For example, currently the auditors are not able to analyze very large samples at lower materiality levels due to time constraints.  By implementing XBRL GL at the beginning of the information supply chain will give auditors an efficient means to question thoroughly detailed transactions at lower materiality levels since processing the valuable data is not going to take as much time anymore.  As a result, this will increase the probability of discovering problems or more importantly any fraud.

If you are interested in learning more about XBRL and internal control, The IIA bookstore has a great book called: “XBRL: Potential Opportunities and Issues for Internal Auditors”.

Posted by Didem Komaromi on May 26 2008. Filed under General. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry