ThinkTWENTY20

On April 5, 2019, I am scheduled to facilitate a session at the United Nations Palais des Nations in Geneva on the Impact of new technologies on Accounting and Audit: Harmonizing Interoperability of Standards and Specifications

In an era where standards for information that flows into, through, and out from accounting, operational and ERP systems seem more desirable than ever before – to simplify cloud systems and integration, to facilitate the design and use of blockchain data and smart contracts, to provide better, more consistent fuel for artificial intelligences, let along facilitating internal and external audit – proliferating accounting and audit data and process specifications without attempts to harmonize where possible and make them as interoperable as possible just doesn’t make sense

Two of the efforts on-site will be celebrating 25 years of accounting electronic data interchange. UN/CEFACT’s (United Nations Centre for Trade Facilitation and Electronic Business) accounting-oriented EDI efforts were largely driven since 1997 by a group known as EDIFICAS Europe. That group was set up in 1991 as a not for profit association under Belgian law as an initiative of the FEE (Fédération des Experts-comptables Européens).  The SIE(standard import export) format of Sweden began in 1994 and has seen tremendous local success. OAGIS, who were invited, started their comprehensive framework in 1996.

XBRL GL will be there too, and clocks in around twenty years, as the ADDFAST (Accounting Data and Financial Statement Transfer) format I developed in 1999 was contributed to XBRL to become XBRL GL. Around the same time, the Object Management Group(OMG) published its General Ledger Specification, and later an Accounts Receivable/Accounts Payable. And ebXML and UBLboth have roots to that beginning time for XML efforts.

In 2005, the OECD published the first Standard Audit File for Taxation (SAF-T, not to be confused with the Simple Agreement for Future Tokens SAFT), followed with an update and the addition of the Standard Audit File for Payroll). The American Institute of CPAs has published a series of Audit Data Standards from 2012 – 2017. And from underlying work at the Chinese National Audit Office, a government-focused standard from INTOSAIwas published in 2016 and the ongoing work of ISO/PC 295 is nearing its release.

With both purpose specific standards, such as the SIE or SAF-T, and larger, holistic works like UN/CEFACT Core Components or UBL, I was surprised to hear about a recent effort from Microsoft, Adobe and SAP – who have also been involved in many of the aforementioned efforts – to create a new Open Data Initiative with a new Common Data Model reportedly unrelated to any of the previous frameworks or standards.

Perhaps I should have learned not to be surprised when a major company associates itself with a new “standard” that conflicts with other standards – especially standards still in development - with which that company is also associated and for which that company is ostensibly supporting adoption. When I first joined my former employer, before it spun off its consulting group in 2002, you would find it associated with multiple competing interchange standards simultaneously. I myself try to be engaged with any effort in accounting and audit data and process standardization space, to encourage harmonization and so the efforts individually and severally benefit from shared knowledge.

So I ask:

Is this collaboration between Adobe, Microsoft and SAP good for standardization, as it helps develop best practices that can be considered in the other existing standards? Can they be criticized for not more actively getting these concepts into existing efforts?

Does it make sense to proliferate accounting and audit data and process standards in hope that adoption of any standard has to be better than completely bespoke data formats?

Should organizations that associate themselves with multiple competing standards be responsible for providing transformation tools (mappings, guidance, software, services) to bridge the differences?