There has been much discussion in the academic literature and in the XBRL community on the role of audit firms in providing assurance services for XBRL filings, especially now that the use of XBRL has been mandated in the United States. This paper presents the development of a framework of the demand for external assurance of XBRL filings predicated on two relative cost arguments. First, that in the absence of a mandate for XBRL filings to be assured by an external auditor, a manager will compare the cost of obtaining external assurance against the cost of obtaining confidence on the filings internally. Second, managers will be reluctant to pay more for external assurance on an XBRL filing than they paid to prepare it. The former is called the external cost relative to internal cost comparison, and the latter the external cost relative to preparation cost comparison. Based on our relative cost framework, it is predicted that there will only be a role for externally provided assurance of XBRL filings if the cost of that assurance can be either reduced or appear less significant to clients. The former outcome can be brought about by shifting assurance from the XBRL filings themselves to assurance of the preparer through a SSAE No. 16/SAS No. 70 report, thereby converting the cost of XBRL assurance from a variable cost to a fixed cost that is spread among many filers. External auditors can also attempt to make the cost of XBRL assurance less salient to managers by folding that cost into their total audit fees.

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