Posts

Five Types of Systems

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Twenty five years ago,  I literally could not tell you the difference between "syntax" and "semantics".  Over that time, I have made it my business to understand this information so that I could figure out how to build what I was trying to build. This is what I have figured out: As I understand it, there are fundamentally five types or categories of systems : Symbolic : marks (symbols, tokens, strings, formulas) Structural : patterns, organization (schemas, tables, models) Semantic : concepts (concepts, relationships, meaning) Pragmatic : grounding (meaning in use, grounded truth, grounded in real world truth) Cognitive : understanding (interpretation, judgement, understanding) Each of these five types or categories or layers of systems have certain specific capabilities.  Each higher number adds additional capabilities beyond what the lower number has. These five types or categories or layers come from multiple disciplines including philosophy, linguistics, cogniti...

Foundation

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Foundations are absolutely vital in engineering something.  A foundation is the underlying system of principles, definitions, and organizing structures that makes higher‑level reasoning, communication, and knowledge possible. A foundation is the base layer of meaning that everything else depends on. A foundation: establishes the primitives, defines the rules, sets the constraints, determines what is possible, ensures consistency, enables interoperability. A foundation is the ground truth of a domain. Meaning is intersubjective . Communication is impossible if there is no mutual cognitive agreement and understanding. Shared understanding  is important.  This blog post is an attempt to move closer to a shared understanding. * * * Overview * * * Symbols, when arranged into structures, become meaningful only through semantic mappings that generate concepts; a theory then specifies those concepts and their relations, and facts are the concrete assertions that instantiate tho...

Essence of Audit and Assurance

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The purpose of this blog post is to explain the essence of assurance at a high level and in terms a lay person can understand.  Primarily, I want to explain the key aspects of an audit; but to do that, it helps to understand the other two forms of assurance.  For certified public accountants (CPAs) and chartered accountants (CAs) as they are called  in the United States, Canada, and in many other jurisdictions; there tend to be three standard levels of assurance provided over general purpose financial statements: Compilation or No Assurance : The CPA/CA assembles financial information into the form of a  financial statements but does not verify information. A compilation is essentially financial statement preparation with disclosure that no assurance is provided. Review or Limited Assurance : The CPA/CA performs very limited inquiries and analytical procedures to conclude whether anything appears materially misstated. This provides moderate or limited assurance. Audi...

Auditology: The Science of Audit Improvement

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In their book, Managing the Hell Out of Your Audit , authors and battle hardened auditors William Englehaupt and Brian Bilsback explain that " auditology " is the systematic art and science of improving audits which are based on a battle-tested framework derived from decades of  hands-on experience across thousands of real-world audit engagements at major accounting firms. The authors point out that 40% of audits are failing. A POGO study says that each of the Big 4 audit firms botched at least 20% of their audits . The breakdown: Deloitte botched 20%; PWC botched 23.6%; EY botched 27.3%; KPMG botched 50%. The authors point out in their book that, " Artificial Intelligence (AI) is often viewed as a kind of magical "pixie dust" that firms can sprinkle on a problem to solve it. " (page 7) The authors go on to on to state that artificial intelligence can't save broken audit processes. The authors explain that Auditology applies proven methodologies includ...

The Financial
Data Platform

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Numeric has this notion of " the financial data platform ".  Numeric was recently introduced in a press release just a few days ago on September 22, 2026,  Numeric Launches Financial Data Platform, the ERP Replacement Built for the Agent Era .  Also, a co-founder of Numeric posted a question on LinkedIn, " Is the Financial Data Platform an ERP? " The purpose of this post is to help me get my head around what Numeric is, what a financial data platform is, to compare and contrast Numeric and the Accounting & Audit by Design Framework , and to otherwise get my head around what accounting is going to become and how the heck to get there effectively. Here are some facts from the Numeric press release and a video from that financial data platform page. This, a paragraph from the press release summarizes the problem of accounting pretty succinctly, "Historically, general ledgers were built to do one job well: produce GAAP-compliant financial statements. To do i...

Seeking Talent Alpha

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Why do different hedge funds with access to identical market information and which use pretty much the same analytical models and analytical tools have dramatically different performance outcomes? If you have a business degree you probably understand what "seeking alpha" means when it comes to financial investments. For those not familiar with this idea, let me explain. "Seeking alpha" in financial investing means trying to earn investment returns above what the market would normally give you for the amount of risk you’re taking.  Seeking alpha implies that you believe the market is not perfectly efficient; that superior skill, superior insight, superior judgement, or superior information can produce superior returns; you accept that "superior" means more effort, higher uncertainty, and perhaps higher fees to obtain that advantage; and that it is in fact possible to beat the market. This Forbes article,  When Everyone Has AI, What Wins? Talent Alpha. , int...

Example of Accounting & Audit by Design

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This blog post provides an example of using the  Accounting & Audit by Design (A&AD) Framework . Here is the set of XBRL artifacts and projections created from those artifacts. The ultimate intent of this example is to provide a beginning to end example of an implementation of Accounting & Audit by Design. You can follow this beginning to end example here on GitHub . This exercise combines two working proof of concepts.  This is  my original record to report working proof of concept .  To that, this JSON-LD example was added. General journal in JSON LD Schema for that general journal  (you can use this viewer to understand schema) These general journal entry types should be expanded to experiment with the Project Tavi specialized cube types that relate to journal entries and events. It might also be useful to experiment with which cube type to use for audit evidence and/or if a new cube type should be proposed for that. What I am trying to do is t...