Digital Financial Reporting

LKIF Core Legal Ontology (Legal Knowledge Interchange Format) is a library of ontologies relevant to the legal domain. This paper discusses the ontology.

As explained by Jason Morris, The main idea behind Rules as Code is that government legislation, statutory rules, regulation, and policy can and should be co-drafted in two languages at the same time: (1) in natural human language as it is now; and (2) in a machine-readable and machine-executable language. Both versions of rules would be published side-by-side.

When I say "rules" I include financial accounting rules, financial reporting rules, financial audit rules and such.

Why do this?  There are a number of reasons. 

• This approach helps to detect and remove ambiguity in rules, making the rules better. By going through the effort of encoding the rule, issues become very apparent. This co-drafting forces rule creators to be precise.
• This approach allows for loopholes to be discovered when writing the rules, rather than after the rule has been officially published.
• This approach allows for machines to be leveraged to test rules and to test for unexpected results when creating rules.
• This provides a single, authoritative interpretation of what the rule means.
• This simplifies the automation of government services.
• This would make something like computational professional services work nicely.

So, before you jump to any rash conclusions let me clarify some things.  First, what if the natural human readable language and the machine readable language could be the SAME language? Say something like Logical English. Other alternatives would be some visual modeling language or a specially designed language based on the domain.  Second, personally I don't like the term "code".  What I think they mean is to use a declarative logical programming language as contrast to an imperative language. Third, this is not about professionals "learning to code".

For more information about Rules as Code, see: 

• Better Rules for Government Discovery Report
• Ted Talk
• Blawx: Rules as Code Demonstration
• Rules as Code Showcase
• Stanford University, FutureLaw 2019, Government as a Platform
• Rules as Code Can, and Should be Done Without Programmers
• Playing Along with Rules as Code
• Computational Law: The Cop in the Back Seat
• More information

The book, Digital Transformation at Scale : Why the Strategy Is Delivery, by Andrew Greenway, is a guide to building a digital institution.  Here is a description of the book:

Organisations that grew up on the web have changed our attitude to the services we rely on every day. We expect them to work, be simple, cheap or free. They have done this by perfecting new technologies, practices, cultures and business models. However, organizations founded before the Internet aren't keeping pace - despite spending millions on IT. Faced with the digital revolution, many people working in large organisations instinctively see its consequences as another layer of complexity. To some of them, 'digital' promises a better fax machine, a quicker horse, a brighter candle. In fact, digital is about applying the culture, practices, business models and technologies of the Internet era to respond to people's raised expectations. It is not a new function. It is not even a new way of running the existing functions of an organisation, whether those are IT or communications. It is a new way of running organisations. A successful digital transformation makes it possible not only to deliver products and services that are simpler, cheaper and better, but for the organisation as a whole to operate effectively in the online era.

The book seems to have been written by consultants that work for Public Digital.

Many years ago I ran across Scratch and Blockly that is based on the ideas of Scratch. I used the notion of a block to manage the structures within an XBRL-based financial report.

Seems like someone else has a similar idea for legal related applications which they called Legal Blawx. This seems to be a free download on GitHub. This Ted Talk explains the ideas behind what is going on here.

To understand Blawx, I would recommended reading Blawx: Rules as Code Demonstration. Also, this YouTube video is helpful in understanding, Encoding Rocks Paper Scissors in Blawx.com.

The working proof of concept is a combination of Flora-2 (a.k.a. ErgoLight), an open source declarative logic programming language, and Blockly, a Google platform for developing visual coding environments. Blockly is a descendent of Scratch, a tool designed to teach kids how to code.

Here is more information on rules as code: 

• Rules as Code
• Working Blawx Proof of Concept
• Blawx Tutorials
• Source Code for above working proof of concept
• Ted Talk

Why does this matter? Computational Professional Services. Microsoft has created something similar to Blockly called Make Code. (This is an ONLINE version of Make Code that you can use.) Imagine a logic driven interface, driven by metalogic and a metamodel.  See this. See this.

Should accountants learn to code?  Here, an AICPA article Should Accounting Students Learn to Code? tries to make the case that there are advantages.  Similarly lawyers are asking the same question.  This article, To Code or Not to Code: should lawyers learn to code? You could generalize this question and ask, "Should professional services providers learn to code?"

Here are my personal observations.  First, I know how to code.  I recall that my first programming class was FORTRAN.  That may have helped me; but the thing that I believed perhaps help me the most was a Formal Logic philosophy class that I took in community college.

I did not just "learn to code" and then my accounting career took off.  Someone referred to me as a "dinker" once. She was right.  I "dink" around, trying things.  How did I have time to dink around?  Well, I made the time.  Something interesting here is that when I was with Price Waterhouse I was one of the most productive staff in our office.  I moved to another smaller CPA firm and I was also the most productive person there also.  Was there some sort of connection between my "dinking" around and being productive?  Dinking around builds productive capacity, but takes away from actually producing.  Producing contributes to production.  Throughout my careeer I was always flipping between producing and building productive capacity.

"Learning to code" is not what is necessary.  What is necessary for some professional accountants is:

• To understand how to think logically (formally).
• To understand how to communicate with information technology professionals.
• To understand how to solve problems and improve processes.

If I had it to do over again, I would go to Stanford University and get into their Symbolic Systems Program. That program did not even exist when I went to college, it was created in 1986 (I graduated from college in 1982).  Also, you might want to check out declarative logic programming.

In my view, "learning to code" is not necessary for every accountant.  Understanding how to code provides certain advantages for certain advantages, similar to how understanding a foreign language can provide certain advantages.  What is important is not just ability, but also diversity.  There is no one right answer.