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Semantic Interoperability for Continuous Auditing

Learn about the importance of semantic interoperability for continuous auditing in the Dutch Taxonomy Project (NTP). Discover how it can improve reporting, reduce administrative burden, and increase transparency.

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Semantic Interoperability for Continuous Auditing

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  1. H.J. van Burg, Project Manager NTP June 2007 Dutch Taxonomy Project (NTP)Semantic interoperability a precondition for continuous auditing.

  2. Index • Reporting chain • Concept • National Taxonomy • Process infrastructure • Precondition for continuous auditing

  3. Accountant Intermediary Solution Provider 2 Solution Provider 1 Regulatory Driven Reporting Many Different Obligations for Business Bank Requests TAX Business Requests CoC Requests Requests Statistics Requests Super Funds Many Integration Points

  4. Administrative burden! • No semantic interoperability • Data (elements) • Context • Processes • Compliance • No transparency • Request and comply over and over again • …

  5. Concept • The law is leading for orchestrating multiple regulatory reporting and monitoring. Starting point are the business processes of the company. • Auditor, accountant and software vendors have an special position in the reporting chain. • Recognize the supply of existing services in this market. General accepted understanding of the objects: underpinned with the covenant (approx. 100 attendee).

  6. One Integration Point CoC Intermediary Annual Accounts Taxonomy Taxonomy Taxonomy Taxonomy TAX Tax Reporting Business Director Statistics Computer Statistics Financial Package (FP) R1 R2 R3 Many for the price of one Business Driven Regulatory Reporting

  7. 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

  8. Taxonomy v1.0 Taxonomy v2.0 Taxonomy v3.0 Taxonomy v4.0 Data Data Data Data Rules Rules Rules Rules National Taxonomy - Roadmap Paper Legislative burden reduction

  9. Per subject / target group Report CBS-min RJ- D BD-VPB BD-IB Form sets BD-LB IFRS-NL IFRS-IASB BD-OB RJ Statistical tax DataTypes (tax) Tax elements Tax Relations Domain specific Relations Data Types GEN-Base Generieke elementen Cross Domain IFRS waiver taxonomy IFRS layer IFRS-GP-2005-05-15 The Dutch taxonomy (1.1)

  10. Cooperation: the coalition of the willing Covenant (June 2006) Manage the covenant

  11. Semantic interoperability a precondition for continuous auditing

  12. Drivers semantic interoperability • Need for more assurance?…better drivers are: • Control the red tape jungle …(NTP) • Cope with another business model: …(Basel II)

  13. Red tape(lessons learned NTP) • Business Driven Regulatory Reporting • Keep the data stored and controlled in one place • Normalize and Harmonize the data elements as much as you can  decrease of control areas • Multiple regulatory reporting is the precondition for multiple regulatory reporting = an important driver for Continuous Auditing • ICT is not a driver; it is, when there is a semantic interoperable layer, nothing more than an enabler!

  14. Basel II(emphasis on prospect information) • Business Driven Business Model • Bank will responde: • Supply business driven products and services • Coverage of operational costs will be less and less  answer Credit Risk Models • Credit Risk Models • Feed with expected semantic data  meet the minimum level of predicting power • High frequency  control the interest rate • Continuous Auditing  increase the level of trust

  15. Paradigm shift auditing Continuous auditing is: (?) • Semantic interoperability helps to meet the CA challenges: • Shorter audit cycle • More flexible • Reduce the audit-related costs • From: outside retrospective auditing  to: provide, as a member of the reporting chain, added value assurance • Outcome of Audits will depend more and more on – standard and ICT powered – internal controls

  16. Thanks More information www.xbrl-ntp.nl

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