Problems Caused by Silos, Documents, Semantics, and Spreadsheets

Think of the process used for creating a financial report.  Is there, perhaps, a way to improve that process?  Is there a completely new paradigm that could be used to create financial reports?  What I have found is that people tend to believe that the way they do something is the way they MUST do that thing.  As is said, "If it isn't broken, then don't fix it."

Well, is the process of creating financial reports broken?  Is audit broken?  Is financial analysis broken?  Here is some information to consider:

  • Problems caused by silos
  • Problems caused by documents
  • Problems caused by semantics
  • Problems caused by spreadsheets

I will look at each of those four bullet points in order.

Problems caused by silos

The first problem I see is the problem caused by silos. The problem is that information used to create financial reports, perform audits, perform financial analysis tends to be created by a number of different parties, the information tends to exist in its own little silo, and making use of this sort of information is hard because you have to go to multiple locations to find and then grab the information you need to perform your work.


What is the solution to this problem? What if there were an easier way to integrate useful resources into one comprehensive set.  For example, a content management system or maybe even better a content management service that acts somewhat like a middle man between the creator of this helpful information and those that need to use those resources.

Think in terms of a "chain" or "supply chain" as contrast to having a silo mentality.

It was harder to see the problem of siloed information before the internet.  But now that pretty much everyone is interconnected pretty much for pennies; the problem is significantly easier to see.

Problems caused by documents

Related to the problems caused by silos is the problem caused by documents.  It is not quite this way any more, but it is close.  Not long ago, the FASB published their document that contained the financial accounting and reporting rules they created, the SEC had their document that contained the rules that they published, CPA firms had their own internal policies and procedures published in yet another separate document, and third party providers such as Wiley published their guidance in their separate document.  Combining all of these resources published in separate documents involved having a library at your fingertips.

What is the solution to this problem?  Well, what if there was a way that documents like PDFs, Word, spreadsheets, HTML pages could all be combined into one set of information.  Then those needing that information could simply grab that specific set. What if industry specific versions of this information could be created.

For more interesting information, see Sean McGrath's seven part series, What is a Document?

Problems caused by semantics

The problems caused by semantics is really the problem caused by a lack of standard machine readable semantics, if there are any semantics at all.  Everyone seems to be focused on "strings". They want to use text search.  This too is related to the silo and document problems.  Those siloed documents are unstructured information.  Computers can only do so much with unstructured information.  When information is unstructured and nonstandard terms are used, it makes computer trying to use that information even less reliable.

What is the solution to this problem?  Define global standard machine readable semantics which computer software can be use to reliably perform work for users of the software. What we need is structured information created by skilled and experienced subject matter experts. You should be thinking "things", not strings.

Problems caused by spreadsheets

The problems caused by spreadsheets similarly is related to the silo, document, and semantics problems.  First, everyone seems to want to create their own spreadsheets due to a tendency for silo mentality.  Second, those spreadsheets tend to be separate documents.  Third, traditional spreadsheets are not semantic oriented, they are basically position (cell) oriented.  If you ever tried to link spreadsheets together and use them, you know what I am talking about.

What is the solution to this problem? What if there were a new type of spreadsheet, a semantic oriented logic spreadsheet?

Rethinking Accounting and Audit Tools

A while back I published my Case for Semantic Oriented Accounting and Audit Working Papers.  Imagine a deductive apparatus on top of those machine readable semantic working papers and schedules.  Imagine modern accountancy.

Insane? Completely crazy?  Perhaps.  But also, perhaps not.

Imagine a machine-readable semantic oriented standards-based accounting and audit working papers ecosystem.  That ecosystem would grow and evolve over time in many ways that create compounding value as opposed to increasing complexity.  Imagine artificial intelligence capabilities leveraging the semantics created by skilled, experienced subject matter experts and information in a standard, machine-readable format.  Think intelligent agents.  Imagine something that is simple enough for small businesses to make use of, but also scales up and can be used by large multinational corporations.

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