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KEYAPPLICATIONS 147is still listed as one of the top-10 technology issues. It is
clear that the AICPA highly encourages accounting profes-
sionals to learn more about technology and issues related
to the Internet and e-business.Overview to Chapter
This chapter explains how CPA firms have used the In-
ternet and e-business to expand the types of services they
offer to clients and to enhance and streamline many of
the existing services they provide, such as offering more
timely information to clients. We focus on applications
in the audit, assurance, financial analysis, and tax areas
and discuss how the Internet can be used to access the
various types of information that CPA firms need, along
with how firms are using the Internet for promotional
purposes. With increased use of the Internet, some issues
arise, particularly with regard to data security and legal is-
sues, including confidentiality of information. Finally, we
explore some possible future developments for firms with
respect to the Internet and e-business applications and
how they may change the nature of CPA firms’ practices.KEY APPLICATIONS
Enhancing and Expanding Services
New Assurance Services
In late 1990s, the AICPA introduced two new assurance
services (WebTrust and SysTrust) to address risks associ-
ated with information systems and to enhance systems
reliability and e-business security (Boritz, Mackler, &
McPhie, 1999; Koreto, 1998a, 1998b). WebTrust is an
attest-level engagement provided by specially licensed
public accountants to build trust between consumers and
companies doing business over the Internet. A WebTrust
seal on a company’s Web site indicates that the company
has a WebTrust audit performed on an average of every
180 days, and that the site complies with the WebTrust
principles and criteria in all or part of the four areas:
business practices and information privacy, transaction
and service integrity, information protection/security and
privacy, and availability and controls over certification au-
thorities. CPAs interested in this assurance service niche
need to have experience in attestation engagements and
knowledge in information technology (for detailed infor-
mation, see http://www.webtrust.org).
Technically, WebTrust, as the name implies, focuses on
Internet-based systems only. On the other hand, SysTrust
is an assurance service in which public accountants in-
dependently test and verify the reliability of a company’s
overall system, measured against the essential SysTrust
principles: availability, security, integrity, and maintain-
ability. SysTrust plays an important role in conducting e-
business, because it is designed to increase the confidence
of management, business partners, customers, stockhold-
ers, and government agencies in IT and systems that sup-
port business operations or any particular activity. With-
out sufficient confidence in a company’s systems, business
partners, employees, and external information users may
not conduct e-business with the company. Public accoun-
tants interested in providing this assurance service must
have information systems audit experience. It could bedesirable to work with certified information systems audi-
tors (CISAs) on SysTrust engagements. For detailed infor-
mation, visit http://www.aicpa.org/assurance/systrust/and
http://www.systrustservices.com.Business and Financial Reporting Applications
Applications of technology for business and financial re-
porting purposes rose to the top of the 2002 top-10 tech-
nology issues list after being in third place in 2001. The
AICPA has long foreseen the need for improved financial
reporting capabilities, and its concern led to the creation
of XBRL (extended business reporting language) in- XBRL is an XML-based specification for preparing,
distributing, and analyzing financial information (Strand,
McGuire, & Watson, 2001). XBRL has been named as the
next-generation digital language of business that can en-
sure the integrity of electronic financial reports (Rezaee,
Hoffman, & Marks, 2001). Mike Willis, partner at Price-
waterhouseCoopers (PWC) and chairman of the XBRL
Project Committee, said, “It is a natural extension of to-
day’s Internet technology to the financial reporting pro-
cess. XBRL provides a platform for the future of business
reporting over the Internet, and it will be fundamental
to the way companies communicate with stakeholders”
(http://www.xbrl.org/). XBRL can standardize financial re-
porting over the Internet, and companies will be able to
use the Web to report information in a timely and accurate
manner.
Although XBRL’s primary target is commercial and in-
dustrial companies for their external financial reporting
needs, XBRL can also be used for data analysis, reporting
needs, and governmental filings (Hannon, 2001). In 2002,
the Securities and Exchange Commission (SEC) created
an online repository of XBRL data and financial reports
through its EDGAR (electronic data gathering analysis
and retrieval) program (Edgar Online, 2002). In addition,
XBRL can be implemented for various reporting needs in
different industries and different countries. XBRL usage
has grown around the world in countries such as Japan,
Singapore, Germany, and South Africa (Hannon, 2002).
XBRL is only beginning to gain visibility. Because most
companies do not know enough about XBRL to under-
stand how it can help their business and how to imple-
ment it, there are tremendous opportunities for CPAs to
provide consulting services in this area such as choosing
proper tools to link a client’s internal financial reporting
system to the client’s Web site for external electronic re-
porting.
Online Services
The Internet allows CPA firms to interact with clients
anytime and anywhere and thus allows for new business
models for firms. Possible models include offering clients
online audit/review and online consulting services. A few
CPA firms have partnered with companies such as Intacct,
Oracle Small Business Suite, and Creative Solutions to
offer clients web-based accounting systems. With power-
ful and secure Internet data centers maintained by busi-
ness partners, auditors have the confidence that clients’
accounting systems are well-maintained and have fewer
concerns about systems availability/reliability (personal
communication, Robert L. Lewis, Jr., and Wendy Bednarz,