Digital Financial Reporting

Over the past year or so I have had the opportunity to understand blockchain, cryptocurrencies, NFTs, DAOs, dApps, and the like by working on a project for Auditchain.  I took that opportunity to try and understand what exactly Auditchain is and how that relates to the work I have been doing with XBRL-based digital financial reporting.

I have summarized all my observations in the document Auditchain Explained in Simple Terms.

Here is the executive summary:

Auditchain is a decentralized accounting, reporting, audit, and analysis ecosystem that enables control, reliability, trust, and therefore effective automation of tasks and processes. Auditchain is a mechanism that can be leveraged to implement modern accounting processes.

The Auditchain Protocol is the world’s first standards-based gamified incentive model-based decentralized continuous accounting, reporting, audit, and analysis virtual machine (a.k.a. operating system, ecosystem, platform, metaverse, system). Part the Auditchain DAO is the Auditchain Protocol and the AUDT token which are owned and governed by its community of AUDT token holders. The community itself provides orchestration of the system to maximize harmony and minimize dissonance.

Using Auditchain, processes and tasks that relate to accounting, reporting, auditing, and analysis can be controlled within and between enterprises. The Auditchain protocol enables accountants, auditors, and analysts to use software created by software engineers, financial standards created by standards setters and regulators to create machine-readable controls and instantiate those machine-readable controls as NFTs to reliably automate tasks and processes. Value is transferred between parties, paying or receiving, AUDT. System friction is reduced, processes are better, faster, and cheaper.

The Pacioli logic/reasoning/rules engine provides a standards-based PROLOG tool than enables machine problem solving capabilities. Pacioli is both an example of and the first decentralized application (dApp) and a core foundational software application that other dApps will use to provide functionality via the Auditchain utility for accounting, reporting, auditing, and analysis.

The ecosystem has modern software tools that supercharge accountants in the performance of the processes and tasks related to compliance reporting by leveraging artificial intelligence (for example).

Trust is maximized, provenance is established and immutable, rules-based artificial intelligence can be used effectively by business professionals. Enterprises can reliably and effectively stream machine-readable knowledge graphs of financial statements with real-time assurance applied by a cohort of Certified Public Accountants (CPAs) and Chartered Accountants (CAs) and that financial and nonfinancial information can be used by Chartered Financial Analysts, (CFAs), data subscribers, regulators, investors and other business professionals or software developers supporting those business professionals in the performance of their work tasks and processes.

A market place results. Royalties are paid to the participants within the ecosystem when work is performed, NFTs are used, software is created, verification is performed, or value is provided in some other manner.

If you have any additional ideas or think that I am getting something wrong, please let me know.

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