MCA has mandated certain class of companies for filing their financial statements in XBRL formats for the year 2010-11 and soon it will be mandated for all companies and later on for filings with RBI, SEBI, IRDA, etc.
With the introduction and growth of reporting in the XBRL format, there will be a greater need for CAs to participate in the development with respect to XBRL implementation. The growth of XBRL can be expected to generate the following opportunities for CA’s:
At the initial stage of XBRL adoption across companies, opportunities for CAs will emerge from the need to outsource XBRL document preparation to meet immediate mandate requirements. This includes:
- Extracting financial statements from Accounting package (Tally, ERP).
- Mapping of financial statements.
- Review of Mapping.
- Actual Conversion.
- Validation of XBRL files.
- Comparatives of previous years need to be converged with XBRL requirements.
- Sorting out the differnces, if any.
- Upload on MCA Portal.
- Regulatory requirements applicable to the entity.
- Feasibility studies.
- Selecting software tool for XBRL implementation.
- User Acceptance Testing of the XBRL application.
- Implementation guidance on tagging and validation process.
- Training staff to understand XBRL.
- End-to-end project implementation, including preparing complete XBRL documents on a fully outsourced basis.
XBRL assurance is the auditor’s opinion on whether a financial statement or other business report published in XBRL, is relevant, accurate, complete, and fairly presented. An XBRL report is an electronic file and called instance in XBRL terminology. Following is an Audit Checklist that can be used for auditing/certifying XBRL instance document.
- Ensure that the right standard (base) taxonomy has been used;
- Ensure that the custom (extension) taxonomy is complete, correct and accurate;
- Ensure that all the elements in the annual report (sourcedata) are included in the XBRL document.
- Ensure that all the sourcedata are mapped (tagged) to the appropriate concepts in the taxonomy.
- Ensure that all the values are correctly captured with the correct contexts, decimals and units.
- Ensure that the XBRL report (instance) is technically correct and validates with the taxonomy;
- Ensure that the sending of the XBRL reporting was complete, accurate and timely.
Right now XBRL is just an Business Reporting Language as extensions are not permitted in the phased implementation process, but soon extensions are permissible, and custom taxonomies are permitted. This will create more opportunities for CA’s such as:
- Development of new taxonomies.
- Maintenance and updation of existing taxonomies from time to time as per the requirements and any revisions in the IFRS or Ind-ASs.
- Evaluation of available software tools.
- Development of new software tools.
It is however to be noted that as with any technology based solution, there is a need to invest in developing the skill sets required. The XBRL framework is an interesting mix of technology and accounting. While accounting is an area of familiarity, the technology element is something that CAs would need to understand. The degree of proficiency required with respect to the technology element would depend on the area of service that a CA intends to focus on. For example, developing Taxonomies and Extension would require a significant degree of expertise in related tools. CAs would therefore need to evaluate the various opportunities that will present themselves in XBRL reporting and develop their own professional roadmaps.
It can be said with a fair degree of certainty that with the implementation of XBRL in companies, CAs needs to invest in enhancing their own skill sets and move up the value chain in all their functions by focussing more on the analysis of data, rather than its compilation, thus making work processes more efficient.