ThinkTWENTY20

Do you keep your keys in your wallet? Few people carry house, business or car keys in the wallet carried in their pocket or purse, unless the “key” is a key card. But when we are discussing Bitcoin and its friends, that is precisely what is in your wallet. As financial professionals, understanding this emerging world of cryptographic wallets and keys will become increasingly important, as the value represented by amounts or goods controlled by those addresses become more mainstream and only accessible with those keys, with limited backup and no backdoor.

Having worked closely with UiPath StudioX for the last four months, I thought it would be good to revisit some of my points from my earlier series on Robotic Process Automation (RPA), particularly on where “RPA approaches” and “pure programmatic approaches” overlap and contrast.

When we talk about emerging technologies in accounting and finance, there’s the list of usual suspects: artificial intelligence, blockchain, drones, Internet of Things, virtual/augmented reality, XBRL and, perhaps, 3D printing. One topic may or may not be in your list of the top 10 tech developments, but has been hit hard and often in our world: Robotic Process Automation (RPA).

Part of the crux of the issues related to the future of corporate reporting is the nature of a “report.”   Is a report something that through conventions makes browsing the information simpler and comparing two reports (either across organizations or across periods) simpler? Does breaking information into multiple interconnected reports, like a web site that gets you started and points you elsewhere as necessary, make more sense? Can the information be abstracted but standardized sufficiently for people to create their own reports that better reflect their own demands and circumstances?

Can corporate reporting be “more effective and engaging for all those with an interest” in an organization? Is technology a facilitator, and can it be a greater facilitator? And is a “feedback loop” between management and the stakeholders a necessary part of that process?

We are continuing a series of blog entries specifically about the FRC’s (UK’s Financial Reporting Council) A Matter of Principles: The Future of Corporate Reporting, a discussion paper published in October 2020 with comments requested by February 5, 2021. In this entry, we are focusing on one sentence within the principle-based document:

The UK’s Financial Reporting Council (FRC) has published a thought-leadership piece, A Matter of Principles: The Future of Corporate Reporting.[1] Does it portray the future of corporate reporting as you see it? Comments are due by February 5, 2021.

I have been trying to stir up the community to talk about materiality, primarily related to XBRL/Inline XBRL, but also related to other non-financial areas, such as Sustainability.

The executive summary for the FRC paper summarizes the discussion on materiality in this way:

“Materiality is essentially a filter for determining what information is included in a particular report. The general principle for materiality that we propose in the model is that materiality will be judged by reference to the communication objective of the specific report. We do not believe that a single definition of materiality is appropriate for all reports.”