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 January 30, 2022 - February 5, 2022
Bounty Hunters
I got the idea of bounty hunters from The Graph (specifically, The Graph Network in Depth Part 2). The Graph calls them "fishermen" and "arbitrators". Others call them bounty hunters.
The purpose of bounty hunters (a.k.a. fishermen, arbitrators) is to expose and fix errors in the system; incorrect information that got into the system, disputes, inconsistencies, and so forth.
In the case of XBRL-based financial reports submitted to the SEC incorrect information could take the following forms:
- Errors made by economic entities creating their XBRL-based financial report.
- Errors made by the creators of XBRL taxonomies such as the US GAAP or IFRS XBRL taxonomies.
- Errors made by those creating rules to control expert systems, test XBRL-based reports, or extract information from such reports.
- Bugs in software applications used to process XBRL-based financial reports.
This is kind of like how hackers expose security flaws in software. Think about it. How useful are XBRL-based financial reports if there are errors in those reports and data aggregators extract information that contains errors? How effective can public companies be creating XBRL-based reports if the base XBRL taxonomies for US GAAP and IFRS have mistakes or missing information? How well will software work if XBRL taxonomies are incomplete or contain mistakes?
The only way for automation to be possible and the benefits of such automation, such as extracting information from XBRL-based financial reports, is if all the pieces are working correctly. Bounty hunters help improve information quality.
Click on the image below and see a bounty hunter's dashboard that I prototyped for the DOW 30.
I have similar dashboard prototypes for the Fortune 100 and the S&P 500. Others will exist for the Russell 1000, Russell 3000, and other groupings of public companies. The equivalent will exist for listed companies in the European Union and other regulatory jurisdictions.
Bounty hunters play a role in the coordination of systems. Stay tuned for another blog post that explains the dynamics of bounty hunting and how you can become a bounty hunter and make money.
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Charlie
in Digital Financial Reporting
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