BLOG: Digital Financial Reporting
This is a blog for information relating to digital financial reporting. This blog is basically my "lab notebook" for experimenting and learning about XBRL-based digital financial reporting. This is my brain storming platform. This is where I think out loud (i.e. publicly) about digital financial reporting. This information is for innovators and early adopters who are ushering in a new era of accounting, reporting, auditing, and analysis in a digital environment.
Much of the information contained in this blog is synthasized, summarized, condensed, better organized and articulated in my book XBRL for Dummies and in the chapters of Intelligent XBRL-based Digital Financial Reporting. If you have any questions, feel free to contact me.
Entries from February 7, 2021 - February 13, 2021
Accounting is an Area of Knowledge
An Area of Knowledge is a highly organized socially constructed aggregation of shared knowledge for a distinct subject matter. An area of knowledge has a specialized insider vocabulary, underlying assumptions (axioms, theorems, constraints), and persistent open questions that have not necessarily been resolved (i.e. flexibility is necessary).
The knowledge framework is a device for exploring an areas of knowledge. Connected knowledge forms knowledge neighborhoods.
All this knowledge can be organized into a human-readable and/or machine-readable knowledge graph. As I have pointed out, XBRL can be used to represent a knowledge graph in both human-readable and machine-readable terms. Other approaches to representing knowledge exist also such as RDF+OWL+SHACL, Prolog, and graph databases.
Accounting is an area of knowledge. You can explain aspects of the accounting area of knowledge, such as the nature of a financial report, using a logical theory. A logical theory can be tested and proven by providing a proof. When all the details are worked out, you have a best practices based proven method.
Here is an easy to understand basic example for personal financial statements.
Welcome to the era of computational professional services and smart regulation!
It is time to properly organize shared accounting knowledge and leverage personal accounting knowledge for profit folks! Welcome to the fourth industrial revolution.
Charlie
in Digital Financial Reporting
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Silo Mentality
Software vendors have a "silo mentality" it seems. None of these software vendors seem to understand the power of standards:
- Uncat for categorizing uncategorized transactions in Quickbooks.
- Circit for bank confirmations
- Adapio for bank transaction analysis
- Autoreview for reviewing bookkeeping discrepancies
- Mindbridge for audit and assurance
- Engine B for audit common data model
- Quickbooks for accounting
- Logdeit for tax filing and XBRL generation
- Aoralaw for making tax decisions
I could list many others. Not one of these application shares information with other applications, i.e. each essentially works in an individual silo (other than some interact with Quickbooks).
Great perspective for each individual software application trying to lock in their customers; incredibly dumb perspective from the point-of-view of a business (i.e. customer) that needs to use those software applications and the functionality provided by each.
This silo mentality or application centric view of the world is outdated and it will not work for modern approaches to accounting.
Standards make markets. These people might want to read and understand "The Box" which explains how the ISO standard shipping container made the world smaller and the world economy bigger.
