Skill to Represent Things Digitally

A critically important skill that some accountants are going to need to have is the capability to represent information digitally.  The world of financial accounting, reporting, auditing, and analysis is rapidly transitioning to digital.

Think about something.  How is all this "digital" stuff going to play out?  A Wardley Map is a sketch of a system.  This video, Wardley Mapping in 90 Seconds points out the following:

"A Wardley Map is a sketch.  Usually of a business, market, or any other kind of work system.  It is a design, maybe a blueprint.  It might be right, it might be wrong.  But it is something we can discuss and refine together on paper to make sure everything we do in reality is as purposeful as it can be. These designs will inevitably be put to the test by the forces of capitalism.  No one is exempt; not even governments or non-profits.  So, to help us cope, we acknowledge this fact up front by arranging our blueprint by evolutionally stage; from the uncharted where things are uncertain, high failure, and a gamble; to the industrialized where things are known, reliable, and standard practice.  Awareness of these qualities helps us approach each part of the system deliberately.  No “one size fits all”, only careful specific intention.  But the map is only the beginning. Behind Wardley Mapping is a deeper strategic thinking process.  There are many patterns to learn, principles to practice, and moves to make.  Take it one step at a time for even the smallest insight can change everything."

This graphic embodies what the paragraph above is saying.  Contemplate this graphic: 

How might XBRL-based digital financial reporting fit into that graphic above?  As the video points out, a Wardley Map might be right, and it might be wrong; but it is something that can be discussed on paper.  Wardley Maps help the thinking process.

There are lots of different tools for doing that. Here are some of the modern tools that I find particularly useful that are all available in the cloud so it is easy to get started:

This is another graphic that I created to help people think of where XBRL-based digital financial reporting was, where it is, and where it is going.  Accountants don't need to have all the right answers...but it would be very helpful to themselves if they understood how to ask good questions.


Another thing I drafted is a rubric for the skills necessary to work with XBRL-based reporting effectively.  Here is that:

Others will very likely build this stuff better, combined pieces together, and improve the information available.

Resources:

Comments

Post a Comment

Popular posts from this blog

Relational Knowledge Graph System (RKGS)

Image
Relational Knowledge Graph System (RKGS) is an interesting idea that combines the relational paradigm and the knowledge graph paradigm.  This documentation, Why RKGS , explains the idea. This gets even more interesting with the notion of "relational AI".  RelationalAI is described as follows by the company of the same name, Relational.ai : “RelationalAI is a cloud-based relational knowledge graph management system, with state of the art probabilistic processing and declarative reasoning at scale to make developing Data Applications a superpower for your business.” This notion of knowledge graphs represented in relational databases fits into my belief that knowledge graphs have two aspects: the expression SYNTAX and the logic of what is expressed or SEMANTICS. While the LOGIC of a knowledge graph is always the same regardless of technical syntax used to express that logic; there are many, many different technical syntaxes that can be used to represent a knowledge graph. There
Read more

Getting Started with Auditchain Luca

Image
The Innovator's Dilemma points out that disruptive innovations often look like toys that are doing everything wrong. Auditchain Luca , which is part of the Auditchain Suite , is a unique approach to creating a knowledge graph .  To experience using Auditchain Luca, have a look at the Getting Started with Auditchain Luca instructions. Be sure to grab the Excel and JSON import files used for this getting started exercise.   This getting started exercise uses one of several different approaches to getting information into a tool for constructing and viewing professional quality knowledge graphs .  Additional getting started guides will be made available over time. Auditchain Luca might not make sense to you if you don't understand the paradigm shift that is occurring and if you have not shifted your mental map. For the next step in your journey, consider trying creating a report using a financial reporting scheme template . If you are struggling to figure out how to register or
Read more

Evaluating the Quality of XBRL-based Financial Reports

Image
From the time public companies started submitting XBRL-based financial reports to the U.S. Securities and Exchange Commission, I have been looking at those reports, trying to understand the XBRL-based reports, and trying to figure out how to get them right.  That information was used to figure out how to create software applications that help professional accountants get these reports right. Here is information that summarizes my testing and results which I stopped doing March 31, 2019: Analysis of the high level accounting relationships in the 10-Ks of about 5,716 financial reports  (5,063 public companies, about 89.1% got all these high level accounting relationships consistent with expectation, 623 were inconsistent and manual confirmation revealed the inconsistency was an error) Documentation that helps you understand 26 different types of errors in XBRL-based reports High quality documentation of hundreds of errors in XBRL-based reports submitted by public companies to the SEC Doc
Read more