BLOG:  Digital Financial Reporting

This is a blog for information relating to digital financial reporting.  It is for innovators and early adopters who are ushering in a new era of digital financial reporting.

Much of the information contained in this blog is summarized, condensed, better organized and articulated in my book XBRL for Dummies and in the three documents on this digital financial reporting page.

Getting Ready for the Digital Age of Accounting, Reporting and Auditing

Current information published by the AICPA and Journal of Accountancy tell professional accountants to "be ready" because "technology is poised to transform the accounting profession" and that "the professional will emerge in a different form".  But there is little information provided as to exactly how to be ready.  What additional skills do professional accountants need to remain relevant?

In the document, Getting Ready for the Digital Age of Accounting, Reporting and Auditing: a Guide for Professional Accountants, I endeavor to provide that information.

While the resources referenced at the end of the document are not perfect; they are the best resources that exist that I have personally seen.  If you are aware of something better, please let me know.  Really.  I want to know.

The information I have put together, while not perfect, is the best summary, synthesis, organization, instantiation that I have come up with to date.  While the referenced resources contain redundant information (because I have not figured out the best organization of the pieces yet); the information set is complete.

If you want to be on one of the early boats to digital financial reporting, that information will help you understand what you have to learn and why you have to learn it.

 

Posted on Saturday, July 15, 2017 at 08:36AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

AICPA News Update: Technologies are poised to reshape the accounting landscape

I am a member of the American Institute of Certified Public Accountants (AICPA). The AICPA is a professional organization of certified public accountants and has approximately 418,000 members in 143 countries currently. 

Each week or so we get an "AICPA News Update".  The update provides information on news important to the profession.

Today, this is how that AICPA News Update started of:

Technology has undoubtedly been the catalyst for change throughout history. But today, this change is happening faster than ever before. The world will look very different in a few years - and the accounting profession is no exception. Artificial intelligence, blockchain and other technologies are poised to reshape the accounting landscape, and we need to be ready.

The AICPA News Update goes on to reference a Journal of Accountancy article for the month of July 2017, Real talk about artificial intelligence and blockchain.

Interestingly, I published my own article with a similar message in late June, Accounting and Auditing in the Digital Age.  My article provides more and better details that explain the change that is about to occur and helps professional accountants understand how to "be ready" as suggested by the AICPA News Update.

About a year ago the CFA Institute made a paper available calling for broader and deeper use of structured data and stated that accountants and auditors needed additional training.

Don't make the all-to-common mistake that most professional accountants make which is to try and understand the change that is about to occur from your current perspective.  That will not work.  Most professional accountants, most business professionals really, did not receive the appropriate training in college that would enable them to get their heads around what is about to happen.

You do not need to join the "learn to code hysteria".  In fact, most professional accountants don't need to learn that much about technology, maybe a little and if you learned a lot you would have an advantage for certain tasks. Some professional accountants will need to learn more than others, but not the typical professional accountant.

My advise is to start by reading the article above, Accounting and Auditing in the Digital Age.  Stay tuned to this blog also.  While for the last 10 or so years this blog related to figuring out how to tame the XBRL beast.  Going forward, I will provide more information useful to the average professional accountant, particularly CPAs and CAs.

Posted on Friday, July 7, 2017 at 01:50PM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

JOA: Real talk about artificial intelligence and blockchain

The Journal of Accountancy, the trade magazine of certified public accountants, published the article Real talk about artificial intelligence and blockchain this month.  Here is on excerpt from that article:

"Technology is poised to transform the accounting profession. Artificial intelligence, robotics, and blockchain are on the verge of automating many traditional core CPA tasks. The profession is at a critical moment, one from which it will emerge in a far different form."

Like I have said, this stuff is going main stream.  One of the panelists sort of makes the right connection between AI and XBRL, but not that clearly.

Clearly I agree with the Journal of Accountancy.  I published a similar article a few days earlier, Accounting and Auditing in the Digital Age.  My article goes into more detail and makes the role XBRL plays in this paradigm shift more clear.  I also explain what CPAs should be doing now to stay on top of these changes.

Posted on Wednesday, July 5, 2017 at 11:15AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

Revised Digital Financial Reporting Manifesto

 I have made some revisions to my Digital Financial Reporting Manifesto.  I tried to simplify the document, fixed some typos, and updated a few things.

This Digital Financial Reporting Manifesto  is intended to help professional accountants and other business professionals to contemplate, discuss, otherwise think about, and ultimately understand why and that an option should exist to express a general purpose financial report digitally.  We need digital financial reports to do accounting and auditing in the digital age.

Posted on Monday, July 3, 2017 at 10:27AM by Registered CommenterCharlie | CommentsPost a Comment | References1 Reference | EmailEmail | PrintPrint

Accounting and Auditing in the Digital Age

In the document Accounting and Auditing in the Digital Age, I try and explain, as succinctly as I possibly can, how three primary enabling technologies will help the medieval tradition of accounting evolve to meet the new operating needs of businesses large and small.  Here is the executive summary:

  • The fourth industrial revolution is occurring which is enabling businesses to operate in significantly different ways; enabling technologies include artificial intelligence, internetworked physical devices, cyber-physical systems, nanotechnology, and biotechnology.
  • Professional accountants and accounting practices, procedures, and processes will need to adapt. Education and training of professional accountants also needs to adapt.
  • Humans augmented by machine capabilities, much like an electronic calculator enabling a human to do math quicker, will empower knowledge workers who know how to leverage the use of those machines.
  • Three primary enabling technological innovations are driving this significant change to the current accounting practices, processes, and methods: XBRL-based structured digital financial reports, knowledge-based systems and other application of artificial intelligence, and blockchain-based distributed ledgers.
  • While it is difficult to precisely predict the productivity gains which will be realized, initial information is showing the productivity gains will be very, very significant.

 Please let me know how I did or if you have ideas for improving this document.

Posted on Wednesday, June 28, 2017 at 04:31PM by Registered CommenterCharlie in | CommentsPost a Comment | References2 References | EmailEmail | PrintPrint