How XBRL Will Enhance the Credibility of Financial Statements

1. How XBRL Will Enhance the Credibility of Financial Statements Presented by Graham Ward President, IFAC

2. The Corporate Reporting Supply Chain Investors & Regulators Information Distributors Auditors Management Directors Analysts Lawyers/Bankers

3. Economics of Credibility • Public values timely, accurate, complete user-friendly data • Value = Reduction of uncertainty times $$$ at risk • Increased transparency and greater usability of corporate reporting information improves credibility • Increased credibility leads to further investment and economic development

4. Information Cost and Value Equation • Value = Reduction of uncertainty times $$$ at risk • Cost = Produce + Structure + Distribute + Consume XBRL provides a powerful ROI as it puts informationin the hands of consumers at lower costs (both production and consumption)

5. The Current Environment • Accelerating drive to enhance business reporting • Increasing demands for more timely information • Market requires increased transparency

6. XBRL - The Path to Progress • Lowers the cost of information production AND consumption • Facilitates exchange of data • Streamlines communications • Expedites information delivery • Enhances transparency of reported information

7. XBRL Supports the Public Interest • XBRL – a tool which allows investors to better protect themselves • Level playing field for all investors • Enhanced investor processing of information • Easier investor analysis • More informed market • Better decisions

8. The Corporate Reporting Supply Chain Effect on Internal Management Processes • More timely, accurate, data for decisions • Enhanced analytical capabilities • Better control environment • Accelerated adoption of reporting models • Reduced costs for producing reports • Enhanced flexibility of information for analysis

9. The Corporate Reporting Supply Chain Effect on External Management Processes • Reduces cost of producing reports in all formats • Flexibility to meet individual circumstances • Greater control over reported information • Enhanced compliance capabilities • Tell your own story (precise & clear)

10. The Corporate Reporting Supply Chain Effect on External Auditors • More timely, accurate, and complete data for analysis • More effective analysis of data for anomalies • More frequent assessments • Enables more efficient research • More effective way of identifying reporting changes and/or relationship with other standards

11. The Corporate Reporting Supply Chain Effect on Regulators • Enhanced validation of reported information • Greater flexibility for changes in reporting requirements • Enables more complete analysis • Meet regulator demand for more frequent and detailed reporting

12. The Corporate Reporting Supply Chain Effect on Stock Exchanges and Credit Agencies • Better information for better analysis & decisions • Easier analysis of reported and credit information • More transparency and increased trading • More useful information across borders

13. The Corporate Reporting Supply Chain Effect on Stock Exchanges • More timely collection of data • Reduced costs of compliance

14. Challenges to Auditors • Development of relevant assurance & attest standards for reports formatted in XBRL • Development of an enhanced business reporting framework • Leverage tools which exploit XBRL (and other relevant Internet standards) • Cost effective assessment of corporate reporting process controls environment

15. Challenges to Auditors • Assessment of management assertions • Assessment of plaintiff risk associated with enhanced analytical capabilities • Process associated with electronic signatures • Assessment of assurance services around more frequent to continuous reporting

16. Benefits Outweigh Risks • Cost-efficiencies for all in the financial reporting supply chain • Greater ability to extract and manipulate relevant data • Reduction in errors • Increased transparency of reported information

17. Current Progress • Prominent companies and organizations use XBRL for publishing business information • Software vendors are delivering XBRL enabled application to the market around the world • Regulatory bodies in Australia, China, Denmark, Germany, Japan, Korea, Netherlands, UK and US are implementing XBRL • Governments in Singapore and New Zealand are expected to endorse XBRL

18. The Corporate Reporting Supply Chain Companies Financial Publishers and Data Aggregators Investors Central Banks Participants Trading Partners Auditors Regulators Management Accountants Software Vendors Business Operations Internal Financial Reporting External Financial Reporting Investment, Lending, Regulation Economic Policymaking Processes

19. Tomorrow’s World • A more efficient / effective supply chain for the capital markets • Timely, accurate, user-friendly data valued by public • Increased usability of reported information • Credible reporting process • More efficient capital allocation • More efficient investment and greater economic development

20. How XBRL Will Enhance the Credibility of Financial Statements Presented by Graham Ward President, IFAC