Assurance on XBRL-Related Documents: The Case of United Technologies Corporation

Abstract

The eXtensible Business Reporting Language (XBRL) was developed to provide financial information users with a standardized method to prepare, publish, and exchange business information in digital format. XBRL is being used around the world for financial reporting and government e-filings. Although there has been growing awareness about assurance issues related to the use of XBRL, current audit practices and standards fall short of providing the needed guidance for the provision of assurance on XBRL-Related Documents. In this paper, we report on a mock assurance engagement that we conducted on the XBRL-Related Documents of United Technologies Corporation's 10-Q for the third quarter of 2005 and repeated on its 10-Q for the third quarter of 2008 to identify the issues that companies and auditors might encounter if they are requested to provide assurance on XBRL-Related Documents. We describe the assurance framework applied in the mock assurance engagement, present the findings from the examination process, and discuss future research opportunities associated with XBRL documents assurance.

Does it add up? Early evidence on the data quality of XBRL filings to the SEC

“…They found a variety of errors in filings, including differences between the XBRL instance document and the official filing and inconsistent use of company identifiers. In a recent case study, Boritz and No (2009) conduct mock assurance of a filing of United Technologies Corporation under that program. They found that while there were errors (e.g., redundant extensions), the instance document was a ''complete and accurate reflection" of the company's original financial statements.…”

Adopting XBRL in Italy: Early evidence of fit between Italian GAAP Taxonomy and current reporting practices of non-listed companies

“…They argue that XBRL may improve the quality of financial information by virtue of well-defined standard taxonomies and a radical increase in the degree of automation facilitated by those taxonomies. Other studies (Boritz and No 2003;Cohen et al 2003;Lymer and Debreceny 2003;Boritz and No 2008;Plumlee and Plumlee 2008;Boritz and No 2009;Srivastava and Kogan 2009) consider the role of taxonomies for assurance on XBRL financial reporting, addressing the problem of data quality. In particular, Srivastava and Kogan (2009) develop a conceptual framework of assertions for providing assurance on XBRL instance documents.…”

Computer-Assisted Functions for Auditing XBRL-Related Documents

“…Based on our review of the aforementioned guidelines (AICPA, 2003;2009;AWG, 2006;PCAOB, 2005) and other literature discussing XBRL assurance issues (AICPA, 2008;Boritz and No, 2009;Plumlee and Plumlee, 2008;Srivastava and Kogan, 2010;XBRL.US, 2008), we developed the following assurance framework for XBRL-related documents.…”

“…The limited guidance for and experience with the creation of XBRL documents raise questions about the quality of XBRL-tagged information, which, in turn, leads to assurance issues related to the use of XBRL (Boritz and No, 2009;2004a;2008;Elliott, 2002;Farewell and Pinsker, 2005;McGuire et al, 2006;Pinsker, 2003;Plumlee and Plumlee, 2008). The goals of this paper are to identify a set of specific audit objectives and related audit tasks for XBRL-tagged information and to discuss how computer-assisted audit functions can be used to carry out those audit tasks.…”

“…XBRL (eXtensible Business Reporting Language) was developed to further enhance information communication by providing a standardized method to prepare, publish, and exchange business, and especially financial, information (Boritz and No, 2009;2004b;Hoffman and Strand, 2001;XBRL International, 2007a). XBRL is being used, being implemented, or being pilot tested around the world for financial reporting and government e-filings as well as other uses.…”