14th International XBRL Conference – Philadelphia, PA

Nearly 500 attendees from diverse segments of the business, government, and academic communities met in Philadelphia last week for the 14th International XBRL Conference, evidence of the positive momentum and great interest in XBRL among regulators, accounting standard setters, analysts and the public and private sectors across the globe. The city of Philadelphia set an appropriate backdrop for a theme of revolutionary times, relevant today to the XBRL phenomenon and its potential global impact on capital markets, financial and business reporting, and business transformation.

Deloitte is playing an active and increasing role in XBRL on a global scale because of its importance to our clients and the potential effect that it will have on the external audit and other services that we provide. We were a platinum sponsor of the Philadelphia conference with significant presence, including presentations from leadership, technical training, and Deloitte representation from North America, Europe, and Australia.

Key Speakers
Bob Kueppers, Deputy CEO, Deloitte USA LLP, joined a host of financial industry luminaries to address the plenary session, including leaders of the International Accounting Standards Board (IASB), International Federation of Accountants (IAFC), Bank of Spain and, from the United States: the SEC, FDIC, FASB, FAF, and the AICPA. Bob believes that XBRL can play a key role in helping companies meet the challenges of managing their businesses and evolving reporting and regulatory requirements. “(XBRL) facilitates reporting information for multiple purposes, which is critical in the current environment of multi-GAAP reporting, overlapping regulatory requirements and dynamic internal reporting needs. It provides the platform for truly integrated reporting, bringing financial, risk and control, and operational information together.”

Bob spoke about the impact of XBRL on the profession. “We need to make sure we understand and are prepared for the potential effect of XBRL in conducting audits, by asking ourselves: What will we be auditing in the future? (We know we will be providing assurance on financial statements filed in XBRL – what about other business information?) How will we execute our audits in an XBRL reporting environment? How can the ability to transfer XBRL data without manual re-entry be used to improve the audit trail? How can the power and flexibility of XBRL be used to develop better audit tools? In the future, will auditors be auditing the financial statements OR will we be auditing the process by which statements are prepared?”

Bob also called for the profession and all stakeholders to “take the lead in driving XBRL forward, playing an active role in shaping the future of business reporting, and dramatically shorten the time that it takes for investors, regulators, public companies and the accounting profession to reap the benefits of these powerful new ideas. “

A transcript of Bob’s speech can be found at: https://www.deloitteresources.com/pgContent.aspx?cid=240053

SEC Chairman Christopher Cox was the keynote speaker at the conference. The SEC has been redoubling efforts to get U.S. companies to use XBRL in financial statements. Chairman Cox reiterated that the SEC is working to accelerate the development of U.S. GAAP taxonomies and is committed to their completion by mid-2007. This major undertaking, in which Deloitte is becoming involved, will result in a fully functional U.S. GAAP taxonomy that will support financial statement filings by this time next year.

Reconciling differences between U.S. and international accounting standards is another area where Cox expects interactive data to be helpful. “It's easy to imagine more that the world can do with this powerful new capability… It is already possible to imagine that XBRL taxonomies — written without bias toward any particular set of accounting rules — could be used to instantly translate any given set of financial data from one accounting system to another.”

Chairman Cox also commented on the effects of XBRL on our profession. “I want to commend the XBRL International Assurance Working Group, which met at the World Congress of Accountants in Istanbul last month, and will meet again here on Thursday. The Working Group is absolutely right to consider how the adoption of XBRL might improve the audit process. Just last month, in a report issued at the Global Public Policy Symposium in Paris, six of the world's top accounting firms extolled the benefits of XBRL, and firmly stated their belief that its adoption will significantly lower both internal and external audit costs.” (This report can be found at: http://www.xbrl.org/Announcements/Interactive-Data-Assurance-2006-11-10.pdf)
A full transcript of Chairman Cox’s speech can be found at http://www.sec.gov/news/speech/2006/spch120506cc.htm

The Deloitte Exhibit
At the Deloitte conference booth we provided practical demonstrations to showcase the technology we’re already using around XBRL. Two tools were featured. The Deloitte Radar (DDAR) pilot tool which benchmarks financial information using XBRL data, and begins to bring the idea of XBRL as an integral part of the audit approach. One of our member firms, Deloitte Australia, is developing and presented a tool to support an online service that will be made available to small and medium sized companies in Australia. Through this tool, companies provide their financial data that is then converted to XBRL to meet a variety of external filing requirements or for internal consolidation.

XBRL Technical Training
Yossef Newman, Deloitte Project Manager for XBRL and Jeff Hansen, AERS, delivered a full day technical training program, "Preparing XBRL Financial Reports". This XBRL International certified course introduced participants to basic XBRL concepts and common XBRL report editing tools, and included hands on exercises in the preparation of XBRL based financial reports.

For more information regarding the 14th International XBRL Conference, please visit the website at http://conference.xbrl.org/ The 15th International XBRL Conference is scheduled to be held in Munich, Germany in June 2007.

Deloitte’s leadership role in this important gathering is noteworthy, and consistent with the position we are taking, both in the U.S. and globally, in the XBRL initiative. Though we can’t be sure of the pace of its adoption, the conference underscored for me the fact that we are at a critical point in time where we must recognize the importance of XBRL to our business. The impact that it might have on reshaping our business models for auditing and the services that we provide to both attest and non-attest clients requires a rapid response and increasing involvement on our part. When we also consider the demands that are potentially at hand from the regulators, and the needs of our clients who are pursuing various uses of XBRL, our mandate for action becomes clear.