Digital Financial Reporting

Financial reporting will be different in the fourth industrial revolution. There seems to be a number of trends that are interacting with one another in the realm of financial reporting.  This is a summary of what I see:

• Machine-based digital reporting: Machine-based digital reporting will likely prevail over the historically prevalent exchange of paper or e-paper by humans. (See this)
• Human-machine collaboration: Machines working along side humans to perform work much like a calculator helps humans do math, as contrast to the current overly manual processes. (Think good-old fashioned rules-based expert systems like TurboTax.)
• Integrated reporting: Sometimes called "triple-bottom line" or "sustainability reporting" or "ESG" as contrast to simply financial reporting. (Check out Larry Fink's letter to CEOs related to climate change.)
• Push-reporting: Push-based reporting as contrast to pull-based reporting. (Example)
• Continuous reporting: Continuous reporting as contrast to the historical "batch" oriented mode of reporting. (See the Finance Factory)
• Continuous auditing: Continuous auditing and AI assisted auditing using things like the dynamic audit solution as contrast to older audit approaches.  (See Imagineering Audit 4.0)
• Triple-entry accounting: Triple-entry accounting leveraging digital distributed ledgers as contrast to double-entry accounting which is internally focused.
• Algorithmic analysis/regulation: Algorithmic regulation or "smart regulation" as contrast to older approaches which tended to be more manual.

Center to all of this is the financial report logical model, enabling a new modern approach to financial reporting.  Software interacts with that model to put things into a report, make sure the report is right, extract information from the report for analysis, etc. Machine-readable metadata glues everything together logically, enabling very significant automation.

Imagine a financial report (or business report for that matter) that combined all of these three characteristics/capabilities: 

1. Nice formatting providing "eye candy" to humans.
2. Inline XBRL providing human-readable details within that nicely formated document, plus fundamental machine-readability.
3. Human readable details; current Inline XBRL viewers are OK, but there is a lot of room for improvement.  For example, seeing that all the mathematical computarions ticked and tied. A standard view of reported facts.

This video that explains how to turn gaseous "facts" into liquid "fact tables" and ultimately into human-readable renderings.

How is your digital maturity? Do you understand that this is more about people and organizational dynamics as contrast to simply technology?  How well do you understand artificial intelligence?  By one account, 81% of business leaders don't understand AI.  Do you have the "technology skills" people like the AICPA say you need?  Personally, I don't believe that you need technology skills; what you need is Computer Empathy.

Did I miss something?  Let me know.  Get the big picture here.