Question 1

Internal controls have four fundamental purposes. Which of the following pairs an internal control for XBRL with an appropriate purpose of internal control?

Accepted Answer

Centralized approval process for taxonomy additions encourages compliance with management directives, which is a purpose of internal control.

Question 2

As a form of internal control for XBRL, periodic user training best addresses the risk of:

Accepted Answer

Periodic user training addresses both tagging errors and inappropriate/missing authorizations as it ensures that users understand how to properly tag data and are aware of their authorization responsibilities within the XBRL system.

Question 3

As a form of internal control to address the risk of inappropriate / missing authorizations, internal audit review of selected transactions is best described as:

Accepted Answer

Internal audit review of selected transactions is an application control, as it involves reviewing specific transactions to ensure that they have been appropriately authorized in accordance with established policies and procedures. This helps to mitigate the risk of unauthorized or incomplete transactions, which could result in financial loss or other negative consequences for the organization.

Question 4

XBRL creates risk exposures for organizations that use it; those risk exposures have to be addressed via various forms of internal control. As discussed previously in the text, internal controls can be classified by purpose (preventive / detective / corrective) and their relationship to the organization's information system (general / application). Consider the list of risks and controls below; for each item, indicate whether the control is primarily preventive / detective / corrective. Also indicate whether the control is a general or application control.

Accepted Answer

The answer of XBRL creates risk exposures for organizations that...

Question 5

The chapter discussed five key terms related to XBRL: extensible, specification, taxonomy, namespace and instance document. Specify which term is most appropriately associated with each item below.
A. A specific example of properly tagged XBRL information.
B. A way to organize knowledge.
C. The Internet address that contains the meanings of XBRL tags.
D. The quality of XBRL that allows people to add to it as necessary.
E. The relationship between XBRL and XML.

Accepted Answer

The answer of The chapter discussed five key terms related...

Question 6

Explain the structure of XBRL, including its relationship to XML.

Accepted Answer

The answer of Explain the structure of XBRL, including its...

Question 7

Explain, in your own words, how most organizations create XBRL instance documents. Specifically address the role of information technology in that process.

Accepted Answer

The answer of Explain, in your own words, how most...

Question 8

Internal control risks associated with XBRL include:

Accepted Answer

XBRL involves tagging financial data in a standardized format to make it easier to analyze and compare. However, there are internal control risks associated with this process, including the potential for tagging errors that could misrepresent the data. Additionally, if the data is compromised or manipulated, it could further undermine the integrity of the financial reporting process. Therefore, both options A and B are valid internal control risks associated with XBRL.

Question 9

Fill in the blanks below based on the benefits of XBRL discussed in the text.
A. Consolidates results across ___ with much greater speed and reliability.
B. Focus effort on ___, rather than on laborious tasks in gathering, compiling and preparing data.
C. Free themselves from ___ systems and software which are difficult and costly to replace.
D. Improve investor relations through provision of more ___ information.
E. Saves costs by preparing data in one form and automatically generating ___.
A. divisions and subsidiariesb. analysis, forecasting and decision makingc. proprietaryd. transparent and user-friendlye. many outputs

Accepted Answer

The answer of Fill in the blanks below based on...

Question 10

Internal controls have four fundamental purposes. Which of the following pairs an internal control for XBRL with an appropriate purpose of internal control?

Accepted Answer

Electronic tagging promotes operating efficiency by automating the process of tagging financial data, which can save time and reduce errors.

Question 11

Rivet Software is one option for creating XBRL-tagged documents. Many organizations follow the six steps listed below to do so; prepare a systems flowchart of the six steps. (Assume all six steps are completed in the same department.) 1. Download taxonomies. 2. Open tagging software and the file to be tagged. 3. Set up an entity profile. 4. Mark up the data. 5. Validate the document. 6. Export the data as an XBRL document.

Accepted Answer

The answer of Rivet Software is one option for creating...

Question 12

COSO published two integrated frameworks to assist organizations in managing risk and developing internal controls. Organizations adopting XBRL could use:

Accepted Answer

Since XBRL involves both managing risks and developing internal controls, organizations adopting XBRL should use both the risk management and internal control frameworks provided by COSO.

Question 13

A disaster recovery plan is a good internal control for which of the following risks associated with XBRL?

Accepted Answer

A disaster recovery plan is designed to address risks related to software failure by ensuring that systems can be restored and data can be recovered in the event of a failure. Tagging errors are typically addressed through validation and review processes, not disaster recovery plans.

Question 14

Compromised data and tagging errors are most closely associated with which element of the COSO enterprise risk management framework?

Accepted Answer

Compromised data and tagging errors are risks that are part of risk assessment, which is the element in the COSO ERM framework that deals with identifying and assessing risks to the organization.

Question 15

What feature of XBRL is indicated by the highlighted phrase in each of the following items? (Do not limit yourself to the five key terms discussed in the text.)
A. A bank would use a different set of XBRL tags than a manufacturer.
B. Certain sets of XBRL tags conform to both a specific version of XBRL and XBRL guidelines for specific sets of tags.
C. Companies can tag their general purpose financial statements with XBRL, as well as their SEC filings.
D. No-one pays to use XBRL.
E. Software capable of interpreting XBRL tags can look on the Internet to find the meaning of those tags.
F. Some sets of XBRL tags conform only to a specific version of XBRL; they need further development.
G. Syntax and punctuation are important when creating an instance document.
H. There are many languages similar to XBRL; all of them belong to the larger XML family.
I. There is an entire set of tags devoted to managing internal information, such as a chart of accounts or journal entries.j. XBRL facilitates interpretation of accounting numbers.

Accepted Answer

The answer of What feature of XBRL is indicated by...

Question 16

Internal control risks associated with XBRL include all of the following except:

Accepted Answer

The answer of Internal control risks associated with XBRL include...

Question 17

The text discussed five key terms related to XBRL. Which one best applies to each of the following items?
A. Amanda said: "Here is the list of asset accounts we'll need to tag in XBRL; it includes items like cash and accounts receivable."
b. Eugene expected to finish tagging the company's financial statements before the end of the day.
C. Jeff asked his supervisor which set of XBRL tags the company should use.
D. Molly wondered where she could find the meaning and interpretation of XBRL tags.
E. Sue commented: "Our company is so unique, I'm sure we'll need to supplement existing tags before we can use XBRL."

Accepted Answer

The answer of The text discussed five key terms related...

Question 18

Using XBRL creates some risk exposures for organizations; an effective tool for managing risk exposures is the risk / control matrix. Using the format discussed in the text, create a risk / control matrix for the risk of XBRL tagging errors.

Accepted Answer

The answer of Using XBRL creates some risk exposures for...

Question 19

An internal auditor is given responsibility for reviewing selected XBRL-tagged documents as a form of internal control. If the internal auditor does not fulfill that responsibility, which of the following may help explain and correct the problem?

Accepted Answer

Expectancy theory suggests that individuals are motivated to act based on the expected outcome. If the internal auditor is not fulfilling their responsibility, it may be due to a lack of motivation or belief that their efforts will lead to desired outcomes. Understanding and addressing these motivational factors can help explain and correct the problem.

Question 20

XBRL creates certain benefits for both accountants and organizations. Consider the statements below; rewrite each one to reflect a benefit of XBRL.1) A company with divisions in more than one country will have to cope with differences in hardware, software, language, currency and terminology in preparing its consolidated financial statements.2) Decision making in accounting information systems that do not use XBRL may be slow and inefficient because information is not as readily available.3) SEC and IRS filings can be very time consuming without XBRL.4) The bookkeeping process in view-driven accounting information systems is costly and prone to error because it constantly rearranges previously collected data into new forms.5) Without the benefit of XBRL, accountants spend a lot of time gathering data and formatting it based on the decisions to be made with it.

Accepted Answer

The answer of XBRL creates certain benefits for both accountants...

Quiz 9: XBRL

Internal controls have four fundamental purposes. Which of the following pairs an internal control for XBRL with an appropriate purpose of internal control?

As a form of internal control for XBRL, periodic user training best addresses the risk of:

As a form of internal control to address the risk of inappropriate / missing authorizations, internal audit review of selected transactions is best described as:

Explain the structure of XBRL, including its relationship to XML.

Explain, in your own words, how most organizations create XBRL instance documents. Specifically address the role of information technology in that process.

Internal control risks associated with XBRL include:

Internal controls have four fundamental purposes. Which of the following pairs an internal control for XBRL with an appropriate purpose of internal control?

COSO published two integrated frameworks to assist organizations in managing risk and developing internal controls. Organizations adopting XBRL could use:

A disaster recovery plan is a good internal control for which of the following risks associated with XBRL?

Compromised data and tagging errors are most closely associated with which element of the COSO enterprise risk management framework?

Internal control risks associated with XBRL include all of the following except:

Using XBRL creates some risk exposures for organizations; an effective tool for managing risk exposures is the risk / control matrix. Using the format discussed in the text, create a risk / control matrix for the risk of XBRL tagging errors.

An internal auditor is given responsibility for reviewing selected XBRL-tagged documents as a form of internal control. If the internal auditor does not fulfill that responsibility, which of the following may help explain and correct the problem?