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Performing Agreed-Upon Procedures Engagements That Address the Completeness, Accuracy, or Consistency of XBRL-Tagged Data – SOP 09-1

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Description

On January 30, 2009, the SEC issued a release adopting final rules, "Interactive Data to Improve Financial Reporting" (SEC rules), that require issuers to provide their financial statements to the SEC and on their corporate Web sites in interactive data format using eXtensible Business Reporting Language (XBRL-tagged data).

This SOP provides practitioners with guidance on performing agreed-upon procedures engagements that address the completeness, accuracy, or consistency of an entity's XBRL-tagged data of information as of a specified date and for a specified period. The engagement is performed under AT section 201, Agreed- Upon Procedures Engagements (AICPA, Professional Standards, vol. 1) and this SOP includes guidance to assist practitioners in applying certain aspects of AT section 201 to the subject matter of XBRL.

The appendices cover practical details such as:

  • Illustrative Engagement Letter

  • Illustrative Representation Letter

  • Illustrative Procedures and Findings

  • Glossary

Table of Contents

  • Introduction and Background
  • Subject Matter of the Engagement
  • Conditions for Engagement Performance
  • Agreement on Sufficiency of Procedures
  • Establishing an Understanding With the Client
  • Nature, Timing, and Extent of Procedures
    • Responsibilities of Management
    • Responsibilities of the Practitioner
    • Procedures to Be Performed
    • Involvement of a Specialist
  • Written Representations
  • Reporting Considerations
  • Knowledge of Matters Outside Agreed-Upon Procedures
  • Explanatory Language in the Practitioner's Agreed-Upon Procedures Report
  • Effective Date
  • Appendix A—Illustrative Management Assertions
  • Appendix B—Illustrative Engagement Letter
  • Appendix C—Illustrative Representation Letter
  • Appendix D—Illustrative Procedures and Findings
  • Appendix E—Illustrative Agreed-Upon Procedures Report
  • Appendix F—Glossary

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Excerpts

Introduction and Background

1.   On January 30, 2009, the Securities and Exchange Commission (SEC) issued a release adopting final rules, "Interactive Data to Improve Financial Reporting" (SEC rules), that require issuers to provide their financial statements to the SEC and on their corporate Web sites in interactive data format using eXtensible Business Reporting Language (XBRL-tagged data).
2.   In this Statement of Position (SOP), the term XBRL-tagged data means information that has been expressed using XBRL and included in one or more electronic files. For purposes of SEC filings, this would include the entity's tagged financial statements (including note disclosures) and financial statement schedules. XBRL is a global standard that provides unique electronically readable codes (tags) for each item in the financial statements or other business report. Tagging can be thought of as placing a unique barcode on each item of information included in business reports so that XBRL-enabled software can search for a specified tag, recognize it, and retrieve it.
3.   Taxonomies are dictionaries that contain the terms used in financial statements and other business reports and their corresponding XBRL tags. Taxonomies specify the tags to be used for individual items of information, such as the tag for the line item "cash and cash equivalents," and for a group of items, such as narrative disclosures. Taxonomies also identify relationships between terms, for example, the term cash and cash equivalents is related to the term current assets. Business rules can also be expressed within a taxonomy, such as "the beginning balance of cash and cash equivalents plus the net changes in cash must equal the ending balance of cash and cash equivalents." Reporting companies may add to the dictionaries of terms, relationships, and business rules (that is, extend the taxonomy).
4.   In order for XBRL to be a useful tool for investors and other users of business information, the data contained in XBRL files must be accurate and reliable. Preparers of XBRLtagged data may be issuers or nonissuers and are responsible for providing accurate information in their XBRL files on which investors and other users of business information may rely. For issuers, the SEC rules emphasize the SEC's expectation that preparers of tagged data will take the initiative to develop practices to promote complete, accurate, and consistent tagging.
5.   The SEC rules state that, "an auditor will not be required to apply AU section 550, Other Information in Documents Containing Audited Financial Statements, AU section 722, Interim Financial Information, or AU section 711, Filings under Federal Securities Statutes (AICPA, Professional Standards, vol. 1), to the interactive data provided as an exhibit in a company's reports or registration statements, or to the viewable interactive data."
6.   Because of factors such as a company's limited experience with XBRL and its desire to ensure the accuracy and reliability of the data, management may express interest in engaging a practitioner to assist them in assessing the completeness, accuracy, or consistency of the XBRLtagged data. Management may be interested in having a practitioner perform procedures to assist management in assessing whether
•  the taxonomy tags or extensions selected are appropriate.
•  the rendering accurately reflects the source document.
•  the XBRL files comply with other aspects of XBRL that cannot be assessed solely by looking at a rendering (for example, whether contexts are used appropriately or whether tags are used consistently from period to period).
It should be noted that this SOP addresses only agreedupon procedures engagements.

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Paperback 2009
Product# 014947
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