Example Accounting & Audit by Design

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.

What I am trying to do is to start at the business event documentation and then flow that information all the way through to the financial statement created using a specific financial reporting framework which summarizes that business event information. This is the specific financial reporting framework I am using for this experiment, my MINI Financial Reporting Framework. This MINI THEORY is that same human readable information represented in machine interpretable global industry standard XBRL. This is an example of the financial statement that I want to end up with.

It is my intention to be able to see each step in this process, from business event documentation to general journal to general ledger to lead schedule to financial statement.  Everything.  Step-by-step.  Clear. Explained.  I want to show this process with at least two separate implementation, preferably three.

I want to create TWO "paths".  The first path is a "perfect world" path where there are no self induced problems.  The second path is more "real world" where common issues and complexities exist.

After that (all of the above) is done, I want to expand the working proof of concept and add an FP&A use case to the end.  Then I want to add an audit evidence graph.

More to come, so stay tuned.

To understand more, read this paper, The End of Reactive Control: Algorithmic Certainty through Accounting and Audit by Design, which was presented at the 3rd International Conference on Auditing and Artificial Intelligence.


Additional Information:

Comments

Post a Comment

Popular posts from this blog

Internationalized Resource Identifier (IRI)

Image
An Internationalized Resource Identifier (IRI) is a standard proposed by the IETF ( RFC 3987 ).  An IRI is a unique sequence of characters that identifies a resource.   IRIs are a generalization of URIs ( RFC3986 ) that permits a wider range of Unicode characters. A  Uniform Resource Identifier (URI) is a unique sequence of characters that identifies an abstract or physical resource.  The difference between an IRI and a URI is that IRIs use the more modern  Universal Character Set (a.k.a. UNICODE)  and URIs use the older ASCII character set. The newer IRI format is compatible with the older URI format. The most  current version of RDF  uses IRIs to identify resources. Don't confuse IRIs with URLs and URNs.  A URL is a web address. A URN is a Uniform Resource Name. This Venn diagram shows the relationship between these different tools: Why are IRIs and URIs important?  If you are thinking in terms of a single database, a silo ...
Read more

Example Financial Statement Holon

Image
As I have mentioned in other posts on my blog, a financial statement is a formal semantic structure , in fact a financial statement is a special type of formal semantic structure referred to as a holon . As I mentioned in my blog posts, Kurt Cagle and Chloe Shannon are providing a lot of very good information about holons on their substack. ( Here is Kurt Cagle's and Chloe Shannon's answers to my questions. Here is an example Kurt Cagle created of a financial statement as a DataBook.) I have provided a bunch of good examples of financial reporting frameworks and reports   In this blog post I want to focus on one specific financial statement and see if I can explain that a financial statement is a "container" of  blocks of information and the "information blocks" that the financial statement contains. Cagle and Shannon point out that a holon is made up of four distinct knowledge graphs that maximize coherence and operationalize the holon which are: The Sc...
Read more

Inhabiting Babel, A Manifesto for Responsible Meaning Engineering

Image
Inhabiting Babel, A Manifesto for Responsible Meaning Engineering is a book written by Nicolas Figay . This book is very practical and easy for a motivated business professional to read. For me, this book has both tempered my expectations as to what is possible and also reassured me of the real possibilities that exist if you do the required work. Accountants and auditors tend to be on the conservative side of the spectrum.  Me included. I am  actually rather conservative in terms of what technology might bring to the table for accounting, reporting, audit, and analysis. I have learned how to "cut the cards" when dealing with sales people and software vendors. What this book does is bring the wisdom from the experiences of an expert in system interoperability, enterprise architectures, and complex systems to helps motivated business professionals and technical professionals that truly want to understand artificial intelligence, cutting through the rhetoric and hype. This boo...
Read more