XBRL-based Digital Financial Reporting

The result of the past fifty to seventy five years of constructing accounting information systems is craft-based processes where data integrity depends on human discipline, human bucket brigades which move information,  rather than based on good system design.  The question is not whether there are better alternatives; there are.  The question is why the accounting and audit profession has tolerated this current situation for so long, and what it will take to transition to something fundamentally more sound. Imagine being able to click on a link to view the audit evidence knowledge graph which attests to the fairness of a financial statement. Imagine an artificial intelligence (AI) agent or a human being able to interpret that information reliably.  Why imagine it? Why not build it? The Nature of the Problem Gartner points out  (page 2) that the typical Fortune 1000 company uses about 800 electronic spreadsheets to create its compliance report.  Each of t...

Defensible knowledge moats come from tacit, lived, context‑rich human experience that AI can’t copy or automate, making them the deepest and most durable form of expertise advantage. Think about it.  How do humans perform work ?  Humans bring knowledge in the form of  skills, experiences, and judgement to the table to perform that work.  How exactly is artificial intelligence going to perform work without that same knowledge; those same skills, experiences, and judgement that humans need? Maybe magic? Not! A moat is anything that makes it hard for competitors to catch you. Knowledge and experience moats are among the deepest because they can't be bought, copied overnight, or shortcut with capital. A knowledge moat is something you understand better than anyone else.  An experience moat is something you have done more times than anyone else. But what exactly makes a knowledge moat or an experience moat "defensible"? The notion of a moat originated with Warren Buf...

I am still contemplating the enterprise , building an enterprise knowledge graph , contemplating a theory for the enterprise , and connecting the enterprise to what I see as the "skeleton of the enterprise knowledge graph" which is the accounting information systems and compliance reporting . It seems to me that the notion of general endeavor management (GEM) is part of this. Roy Roebuck has created what he refers to as Roebuck General Endeavor Management ( RGEM ). Here is a primer which is available on Amazon.com. Here is a book that explains Roebuck's framework for GEM. General Endeavor Management (GEM) is a theoretical and operational framework designed to model, organize, and execute complex endeavors using unified systems architecture and knowledge representation.  An enterprise is effectively an endeavor. Unlike traditional management models like the Zachman Framework , TOGAF , ArchiMate , EACOE that separate distinct business functions; such as operations, fin...

I have this hypothesis that compliance reporting and the accounting information systems that generate that compliance report can be the "skeleton" of what people are referring to as the " enterprise knowledge graph ".  This blog article is my brainstorming about this idea. X-Ray and Skeleton In their article, The Financial Statement is a Projection , Puget Research points out that a financial statement is like an x-ray and they point out that "A financial statement is one of civilization’s most successful compression technologies." Paraphrasing, a financial statement is not "the enterprise", it is a compressed summary of information about an enterprise that is the output from a very trusted set of processes called accounting information systems.  In compliance reporting, an enterprise does not provide every colorful detail about itself; it provides a compressed, summarized version of information about the enterprise generally following some speci...

InterPlanetary Linked Data (IPLD) is one of the best ideas I have heard in years.  It seems to provide the possibility of creating a universal semantic substrate which is 100% independent of any specific technical "protocol" or "syntax" or "format". Here are links to resources to help you understand IPLD. Website: https://ipld.io  Documentation:  https://ipld.io/docs/ GitHub:  https://github.com/ipld/ipld Explainer video:  https://youtu.be/totVQXYS1N8 Primer for software engineers:  https://ipld.io/docs/intro/primer/ IPLD provides a canonical, protocol independent way to describe and link data. Any data structure that connects information using hashes can be expressed in IPLD’s model. This ensures that “ the same logical object always maps to the exact same sequence of bits ”.  By providing a unified namespace for all hash based data, IPLD makes information exchange: Cross protocol/format : data can be followed across different technical systems, synt...