Dutch Taxonomy Project (NTP) Semantic data and process interoperability and continuous auditing.

1. Dutch Taxonomy Project (NTP)Semantic data and process interoperability andcontinuous auditing. H.J. van Burg, Project Director NTP October 2007

2. Index Reporting chain The concept The National Taxonomy Case (2) And where fits continuous auditing?

3. Regulatory Driven Reporting Bank Accountant Requests TAX Business Requests CoC Intermediary Requests Requests Statistics Solution Provider 1 Requests Super Funds Solution Provider 2

4. Observations Information is not interconnected between domains • mainly due to different accounting principles and contexts Inefficiencies in preparation and compliance Reliability of information is lacking behind

5. The concept Rationalize: 1. data, 2. processes and 3. compliance The rationalization process always complies with law and starts with the common accounting practice businesses Data and process taxonomies interconnect (reporting) domains as well as interconnect law and common practice A taxonomy (data and process) drive control framework results in an effective and efficient reporting chain

6. Build the National Taxonomy Collection of standards Collection of rule books Collection of forms Harmonisation Business data model Rules & process model Data model Business Data Rules Government Data Iterative Taxonomy Data Rules

7. National Taxonomy – Roadmap Law • Red Paper Legislative burden reduction Taxonomy v1.0 Taxonomy v2.0 Taxonomy v3.0 Taxonomy v4.0 Data Rules Data Rules Data Rules Data Rules

8. Process server

9. Services

10. Validation service

11. Business Driven Regulatory Reporting CoC Taxonomy Intermediary Director Annual Accounts TAX Business Tax Reporting Taxonomy Statistics Computer Financial Package (FP) Statistics R1 Taxonomy Taxonomy R2 R3

12. Observations Information is interconnected between domains • common ground in accounting principles and contexts Preparation of report information is effective and efficient Reliability of information has increased but still there is a need for compliance

13. Case: Limited Corporation Tax Declaration (LCTD) Observation More and more information is required (1.600 data elements) Information is not interconnected with the annual accounts Tax advisers prepare the Limited Corporation Tax Declaration (LCTD) Objectives (see paper) Limit the amount of data element what is legally required (400) Interconnect data en processes definitions (taxonomies) of LCTD with the annual accounts Agree on mutual compliance

14. Case: LCTD Preparation Design the Limited Corporation Tax Declaration extension (objective: general accepted tax and interconnected accounting principles) Design the subsequent processes (objective: impose checks and balances) Agree on a Tax Control Framework (objective: segregation of responsibilities Intermediary and Tax Agent) Execution Pilot and controlled

15. Case: Basel II Observation Preconditions for implementation are not fulfilled: No semantic interoperable data framework (accounting principles) Reporting is not interconnected with annual of fiscal domain Expectation gab on assurance The existing gathering is inefficient and very expensive Objectives Comply with the market!

16. Case: Basel II Preparation Build a Basel II extension on the Dutch taxonomy (objective: general accepted accounting principles and interconnect) Design the subsequent processes (objective: impose checks and balances) Agree on a Control Framework (objective: segregation of responsibilities Intermediary and Financial institute) Execution Pilot starts in 2009

17. Continuous auditing Control Framework (Annual, Tax or / and Basel II): Interconnect domains, Segregation of responsibilities and Scope prepares / auditing work Different purpose, contexts and frequencies of reporting requires continuous auditing work More and more auditing work will become part of the internal control framework

18. Thank you More information www.xbrl-ntp.nl