Digital Financial Reporting

If you listened to the video of Ray Dalio being interviewed by Garry Kasparov where they talk about artificial intelligence, AI and Algorithmic Decistion Making, you heard Ray Dalio explaining how important it is to distinguish between “closed systems” as contrast to “open systems”.  I am in complete agreement.

Why is this important?  It is important to understand the difference between the reliability and predictability (i.e. tolerance for error) that you get from open versus closed systems and how much effort it takes to manage that control.  Systems need to be controlled.  Rework is expensive.

I have not found a discussion of "control" that specifically relates to computer systems.  I sometimes use the terms "finite" as contrast to "infinite" to describe what I am getting at.  Other times I used the notions of "open systems" as contrast to "closed systems".

I found three Wikipedia articles that discuss this notion: Closed system (control theory); Classical control theory, and Control theory.  I also found this article, An Introduction to Systems and Control Theory for Computer Scientists and Engineers, which points out:

“software engineers need to use control concepts to master the ever-increasing complexity of computing systems” 

Guaranteed performance is a good thing.  Stability is a good thing.  Being as high as possible on the knowledge representation spectrum is a good thing.

Admittedly, I do not understand how to describe this formally.  However, I do understand that being able to control a system such as an XBRL-based digital financial report is a business requirment.  It is not a "nice to have" feature; it is a required feature.

I try to explain this in this document. I can point out all that is necessary with this logical theory.  I can prove that I am getting this right with these working proof of concepts and this conformance suite. And all this can be supplemented using the techniques and philosophies of Lean Six Sigma.

All of this can be applied to implement continuous accounting, reporting, and auditing effectively.

Not clear on what needs to be controlled?  Watch these three videos: Impediments Part 1; Impediments Part 2; Impediments Part 3.

Also, I added this Process Control video to the Understanding Financial Report Logical System playlist.