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XBRL JapanJ
Standardize to Enhance: Process &Controls, Analytical Insights,Economics
October 1, 2013

Discussion Topics
pTrends-Around the World-Implications-Analytical Insights-Lessons LearnedStandardize to Empower Reporting Professionals:- Enhancing Reporting Process & Controls Agility, Effectiveness, Economics
Next Steps

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Trends

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Examplespoff More Granular Transparency
py / Insightsg“A comparison
pof Income,, Revenue,, and Taxes ofvarious companies”“Visual template representation - a comparison of
unremitted taxes based on earnings made overseas”“XBRL Data in Use - Accumulated values of key items”

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Openp Analytics
yat ACRA in Singapore
g pEnhancing Analysis of Business Reports

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5Adoption
pis acceleratingg around the WorldPwC

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XBRL Around the World: Latin America
Panama – Banking Supervision
Columbia (in development)
Peru – Banking
gSupervision andSecurities
Regulation

Chile – Corporate
Reporting andInsurance
Regulation

Brazil National Treasury: Public
Sector Accounting and Fiscal
Information System - 2014

Uruguay – Central Bank(in development
Argentina – Central Bank(in development)

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XBRL Around the World: Europep
Norway – Oslo
Stock Exchange

Finland – SBR (2014)

Belgium
SwedenLithuania

DDenmarkkNetherlands - SBR

UK HMRC

Germany

Ireland Customs
House

Poland – National BankFrance – Central
Bank

Ukraine – Corporate
Reporting (in(development)

Switzerland

Spain
Luxembourg
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Italy

Turkey – SBR (2014)
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XBRL Around the World: EU

Solvency II
Basel IIBusinessRegisters

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9XBRL Around the World: Asia and Oceana

Japan
China
Korea
Thailand

UAE

Singapore
Saudi Arabia
India
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Australia
Indonesia

Malaysia

10Trends‘Big Data’Migration from unstructured to structured information accelerating; driven largely
by economics and transparency demand
Expansion of existing programs (e.g. Australia, Japan, Singapore, etc.)
New regulatory
egu ato y territory
te to y adopt
adoptiono (e.g. Brazil,a , Malaysia,
a ays a, Russia,
uss a, Saud
Saudi Arabia,
ab a, etc.)
New disclosure areas (e.g. Solvency II, CDR, WICI, CSR/GRI, Corp Actions, etc.)
Assurance mandates on XBRL reports increasing (e.g. Netherlands, India, etc.)
Alignment with other relevant standards (e.g.
(e g LEI,LEI RIXML,RIXML ISO,ISO etc.)
etc )Internal applications at GL and sub-ledgers (e.g. Data Act, Brazil, companies, etc.)
Emergence of new enabling software
P d i / Disclosure
Production
Di lManagementM/M
Mappingi
Consumption / analytical applications
Standardized analytics enable collaboration among analysts / persistent analysis
And then there is the next thing.
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11Corpp Actions – closing
gggap
p between Issuer & Investor
LAWYERS, ADVISORS, LEAD MANAGERS, REGISTRARS,TRANSFER/FILING/INFORMATION/PUBLICATION AGENTS

REGULATORS, SHARE REGISTER, ANALYTICSCOMPANYINVESTORISSUERPwC

EXCHANGE,
FUND MANAGERS,WIRE SERVICES,FUND ADVISORS,REFERENCE & TRADINGINVESTMENTDATA SERVICESMANAGERCENTRAL DEPOSITORY, CUSTODIANS,
INSTITUTION,
SUB‐CUSTODIANS, GLOBALOFFSHORE INVESTORSCUSTODIANS, BROKER‐DEALERS

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Standardization enhances Analyticsy((Social Analytics)y)Standardized Data, Formulas/Models, Relationships, Presentations
Deeper levels of analysis and insights as more data is immediately ‘reusable’
Enables collaboration by analysts on models (‘YouTube’ for modeling)
Shift in Time / Resources applied to:Accessing data
Inputtingpg data into analyticalyapplications
pp
Correcting validation and input errors
Performing analytics
Analyzing analytical results
Asking followfollow-up questions
Analyzing answers to questions
Making decisions

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Migration frommanual data lifting tointellectual efforts

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US SEC’s Analytics
yhave been Standardized & Improvedp
Here are examples of how the SEC has used standardized data and standardized
analytics to enhance their risk assessment capabilities.

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Explicitp
Demand fromfInvestors

SIFMA MembersCFA Institute“The Irreversible Trend toward Greater
Connectivity and Data in Financial Reporting”
Recommendation: “The SEC should move
forward with its 21st Century Disclosure
Project”
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Examplespoff Poor Report
pQuality
Qy
Examples of Report Quality Issues in Company Reports (2012 10ks):"Quality means doing it right when no one is looking." – Henry Ford.
TypeXBRL Report

Correct

Fact Problem

UFE $4.3B$4 3B

UFE $17.2B$17 2B

Fact Problem

Settlements -77910000 (dr)Settlements 77910000 (dr)Fact Problem

Public Float $6.3 Quintillion(17 zeros)

Public Float $6.3B

Fact Problem

Accumulated
Amortization - $28.5B (cr)Accumulated Amortization$28.5B (cr)Extension
Problem

xxx.Cashxxx
Cash and CashEquivalents

US GAAP Term: Cash andCash Equivalents

Report Problem

Net Cash Provided by Ops of$1 3B$1.3B

Net Cash Provided by Ops
of $1.0B
$1 0B

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Learning’sg
Few like change / uncertainty
Perceptions drive reality – “NoNo one is going to buy anything over the InternetInternet”
Regulatory Mandate (Bad) …………… OR ……………. Supply Chain Standard (Good)
Implementation approach dictates initial cost/benefit – perception
Bolt on adds cost/timeBolt-oncost/time………….OR
OR ……………Build-in
Build in reduces cost/time
Review procedures need to address structures (not just presentation)
Process changes (and related benefits) follow the “Bell Curve”
I
Investorddemandd ffor
Structured disclosures is strong
Report quality is high; however, actual report quality is poor
Enabling software
Critical to benefit realization; most still early stage but maturing
Development based upon customer demand/request
There are many more supply chain applications (e.g. Corporate Actions, WICI, etc.)that are now emerging
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Empowering Reporting Professionals

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Perspective
p
Question: What software
Qfapplicationpp
ismost commonly used by companies for reporting?
1
1.

SAP

2. Oracle
3. Hyperion
4. Fujitsu
5.

BAAN

6. IBM Cognos
7.

JD Edwards

8. Microsoft Dynamics
9. Office
Offi

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Common Reportp
Assemblyy Manual Processes
While companies have significant investments in ERP andconsolidation application,
pp, the ‘last mile’ of reportpassemblyy and review
processes and controls are highly manual. ‘Last Mile’ process steps thatare commonly manual include:•Spreadsheet
pAggregation
gg g•Report Assembly from disparate sources•

Report Validation•

N
Narrativeti TTextt G
Generationti•

Review Processes via emailing of Office docs•

Benchmarking / Peer & Best Practice Assessments•

References from disclosures to relevant standards, regulations, key
accounting policies & memos•

Tagging of completed reports with XBRL taxonomy elements

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TypicalypReportpAssemblyy Process Last Mile (Manual)()
Reports are created viaa series of access andrekeying efforts
manually replicatinginformation contained inthe company accounting
records.
In a typical company
process there are ‘no’process,no to‘very limited’ explicit
connections between
reported disclosures andcompany accounting
records. As a result,report assembly andvalidation is largely amanual effort.
effortPwC* - Not drawn to scale.

Form
10K

XBRL Press Proxy
Exhibit Release

Board
ReportStat
ReportReports

Stat
ReportThe ‘Last
Last
Mile’

Accounting Records
Consolidation
Processes
Spreadsheet
Sd h tAggregation*Business SegmentyFeedinggSystems
Consolidation
21TypicalypReportpAssemblyy Process Last Mile (Manual)()Reports are created via
a series of access andrekeying efforts
manually replicating
information contained in
the company accounting
records.
In a typical company
process there are ‘no’process,
no to‘very limited’ explicit
connections between
reported disclosures andcompany accounting
records. As a result,report assembly andvalidation is largely amanual effort.
effortPwC* - Not drawn to scale.

Form
10K

XBRL Press Proxy
Exhibit Release

Board
ReportStat
ReportStat
ReportReports

Accounting Records
Consolidation
Processes
SpreadsheetSd h t
Aggregation*Business Segment
yFeeding
gSystems
Consolidation
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スライド 22
RMW2

this is the same as the prior slide; just with the excel worksheets expanded for effect.
R M Willis, 2013/09/27

Outsourcing
g may
y be common: But control is importantp$19B"Earlier this morning RR Donnelley, the financial printer, informed us that theyh d ffiled
hadl d our ddraft
f 8K earnings statement without
hauthorization.
hWe h
have
ceased trading on NASDAQ while we work to finalize the document. Once it's
finalized we will release our earnings, resume trading on NASDAQ and hold ourearnings call as normal at 1:30 PM PT,PT," the company said.
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Manyy CFO’s Moving
g to Build – in XBRLBowne / RR DONNELLEY

And the market sharedecline over the past 2years for the major
outsourcing vendor reflects
this transition.

70.00%

60 00%
60.00%

50.00%

40.00%RR DONNELLEY

30.00%

20.00%

10.00%

0.00%

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q1

q2

q3

q4

q1

q2

q3

q4

2011

2011

2011

2011

2012

2012

2012

2012

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Transition to ‘built-in’ approach
ppLowers Cost/time while enhancing control
There is a history lesson here for financial executives with respect tosupply chain standardization: Almost 40 years ago, grocery store
managers initially had inventory clerks apply the UPC/bar code toproducts when they stocked the shelves (at the very end of the supplychain).
h i ) Thi
This manuall ‘bolt-on’‘b l’ end
d off theh supplyl chainh i approachh gaveway to the automated application of the UPC/bar code at the very
beginning of the supply chain; thereby enabling automation of
inventory management
management, sales processes,processes and consumer buying patterninsights and a $17B annual cost reductions.
Financial Executives may follow a similar path via the adoption of
XBRL initially bolting-onbolting on to existing manual processes andsubsequently targeting the broad range of highly manual reportassembly and review processes and controls outlined on the earlier
slideslide.
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Disclosure Managementg– Streamlining
g the Last Mile
New Relationships
Mapping relationships between
companyp y reportp writer systems
yand the company report are
explicit and access, reuse andsome validation processes areautomated within the built-in
application. These explicit
relationships now can exist
between source system
accounting
g records andcompany reports.
Disclosure Management
process controls are critical andmay include: application accesscontrols; control over mappings(both incoming and outgoing);
log of changes; reportversioning controls and audit
trail; and others.
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Form
10K

XBRL Press Proxy
Exhibit Release

Board
ReportStat
ReportStat
ReportReports

Accounting Records
DisclosureManagement Apps

Consolidation
Processes
Spreadsheet
Aggregation

Business Segment
Systems Feeding
Consolidation
26Disclosure Managementg
Process Enhancements‘Last Mile’ process steps that are automated and streamlined via effective
Disclosure Management application implementation include:• Spreadsheet Assembly is automated ‘pulling’ data from disparate sourcesystems• Report Assembly (& updating) is automated pulling data from disparate
systemst• Report Validation is built into the DM application• Some Narrative Text Generation is automated

25% to 50% cost andtime enhancements• Review Processes are collaborative and provide a ‘topical’ view• Benchmarking / Peer & Best Practice Assessments are automatically loaded incontext of the company disclosures (e.g. Income taxes)• References explicitly link from reporting concepts to standards, regulations,key accounting memos, and company policies• Virtual Reporting Service Center useful across all reporting types• XBRL Reports are a by-product of report assembly and review
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Disclosure ManagementgArticles“Disclosure Management: Streamlining the Last Mile” Outlines g
general p
process enhancements enabled“How to Differentiate Disclosure ManagementFeatures”“Grocery Store Managers & Financial Executives: Bolton or Built-in to Realize Process Benefits?”

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Next StepsPwC29Next Stepsp forf Producers
Enhance review of report structures to ensure report quality
Use Disclosure Management to Standardize Reporting Processes & Controls- Apply the standardized reporting processes & controls across all content silos(e.g. CoCompany
pa y reports,epo ts, Corp
Co p Actions,ct o s, IR,, Internal,
te a , etc.)- Migrate reporting content silos towards a Virtual Service Center- Use Disclosure Management to enable process effectiveness andPrioritize internal ERP instances for Standardization to enhance internaltransparency‘Robocop’
Robocop for your internal GRC
GRC, IA,IA BI,BI WICI,WICI etc.
etc

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Next Stepsp forf Consumers
Communicate demand for high quality structured disclosures
Use freely available granular disclosures to enhance:- Timeliness / persistence of analysis- Insights from more granular analysis- Number of companies analyzed- Cost of analysis
Standardize formulas / models to enhance:- Institutional management of analytical intellectual property- Institutional transparency of how, where and when analytics are applied

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Thank you

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not constitutei
professional
f il advice.
d i Y
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