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Understanding Expert Systems Applicability to Financial Reporting

In a prior blog post I described how digital financial reporting will work in the future at a very high level.  Notice at the very bottom of that blog post where I very briefly described Process Execution through Application Ontologies. It turns out that the notion of "process execution through application ontologies" is known by another term:  expert systems.

In yet another blog post I provided some high-level information about semantic technologies.  Included within that set of information was a link to a book, Systematic Introduction to Expert Systems, by Frank Puppe.  I bought that book from Amazon.com.  You can read the first chapter and a few other parts of the book here on Google Books.

So what is an expert system?  I found the following definitions that I like and that will serve my purpose here:

Expert systems are computer programs that are built to mimic human behavior and knowledge.

A computer application that performs a task that would otherwise be performed by a human expert.

Frank Puppe explains in his book that there are three general categories of expert systems:

  • Classification or diagnosis type: helps users of the system select from a set of given alternatives.
  • Construction type: helps users of the system assemble something from given primitive components.
  • Simulation type: helps users of the system understand how some model reacts to certain inputs.

A digital financial report creation tool is basically an expert system that helps its user, a professional accountant, assemble and generate an external financial report.  The final product, the financial report, could be generated in human-readable form like the HTML, PDF, or word processing document-type outputs; and/or in machine-readable form such as XBRL or RDF/OWL.

Chapter 21, Review of the Problem-Solving Type Construction, of Frank Puppe's book describes in detail how this would work.

Remember my blog post, Understanding Blocks, Slots, Templates, and Exemplars? Remember the two documents Understanding the Basic Mechanics of a Digital Financial Report and Understanding the Mechanics of an SEC-type XBRL-based Digital Financial Report?  This stuff might make more sense to you now.

But most importantly, the document Knowledge Engineering Basics for Accounting Professionals helps one understand how to get a machine to do useful stuff.  Nonsense in, nonsense out.

Many people probably think that I am nuts and that a computer could not possibly be any more helpful than it is being today in the process of creating a financial report.  Others may understand what I am saying and believe me.  Time will reveal who is right.  Where do you weigh in?

Posted on Wednesday, July 15, 2015 at 12:05PM by Registered CommenterCharlie in | CommentsPost a Comment

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