For accessing XML documents use iXML

For XSLT you can create a "Transformation".
1. Object Navigator > Right Click Package > Create > Other (1) > Transformation
(This opens an XSLT editor, you can use also transaction STRANS)

2. Write down your XSLT specs

3. Activate it (!)

4. Test it (F8)
(This will use program "SXSLT_TEST", here you can look how to do it in ABAP)

5. Write a small program to automate transformation from one file to another

*&---------------------------------------------------------------------*
*& Report  Y_IXML001
*&
*&---------------------------------------------------------------------*
*&
*&
*&---------------------------------------------------------------------*

REPORT  Y_IXML001.

Data: g_ixml type ref to if_ixml,
      streamFactory type ref to if_ixml_stream_factory,
      iStream type ref to if_ixml_istream,
      oStream type REF TO IF_IXML_OSTREAM,
      xmlRes type string,
      out type string.

type-pools: ixml.
class cl_ixml definition load.

g_ixml = cl_ixml=>create( ).

streamFactory = g_ixml->create_stream_factory( ).

iStream = streamFactory->create_istream_uri( 'file://e:\sap\test.xml' ).
oStream = streamFactory->create_ostream_uri( 'file://e:\sap\result.xml' ).

CALL TRANSFORMATION Y_TRANS001
  SOURCE XML iStream
  RESULT XML oStream.

write 'Done.'.