ThinkTWENTY20

Continuing with this series on tools to help financial professionals get graphical, my last blog entry focused on a software product I have found very helpful over the last ten years. I use it to quickly capture, and look for organization in, my own thoughts - as well as using it to catalyze and organize group discussions. That technique is known as Mind Mapping. Now onto Mind Mapping “on steroids”.

Financial professionals have a lot to learn, to maintain, to coordinate, on which to collaborate, and to communicate. Spreadsheets are our universal “hammer” (as in, “when you have a hammer, everything looks like a nail”). But spreadsheets fall short in many ways and for many tasks.

In the Fall 2019 issue of ThinkTWENTY20, I wrote about assurance issues related to digital media – moving beyond numbers and words in reporting and audit workpaper/audit evidence issues related to images and video.

When Christopher Cox, then chair of the U.S. Securities and Exchange Commission, was introducing the new XBRL (Extensible Business Reporting Language) regime for financial reporting, he joked that he didn’t want to mention the XBRL term “taxonomy”, because people hate the word “tax”. Indeed, there is an obvious chasm between the worlds of financial statements and tax, and often between financial professionals and tax professionals.

Continuous (external) audit processes wouldn’t be complete without some way to gather enough information about an enterprise’s commitments and contingencies to limit the risks of material misstatement.

I am not individually being successful in countering claims that blockchain will make auditing obsolete. So I’ve decided to try another tack: what will it take for a blockchain ecosystem to develop that is sufficient to be self-auditing? Not saying all these things would be bad, but what are the foundational changes that will make this possible?