Accounting Systems Need the Pragmatic Web

The Pragmatic Web is a thing. And accounting, reporting (in particular compliance reporting), audit, and analysis need the Pragmatic Web.

The notion of the Pragmatic Web was first articulated in 2002 in a paper by Munindar P. Singh, The Pragmatic Web: Preliminary Thoughts, and in 2006 by Mareike Schoop, Aldo de Moor, and Jan L.G. Dietz in their paper, The Pragmatic Web: A Manifesto. In that manifesto, they state:

"The vision of the Pragmatic Web is thus to augment human collaboration effectively by appropriate technologies, such as systems for ontology negotiations, for ontology-based business interactions, and for pragmatic ontology-building efforts in communities of practice. In this view, the Pragmatic Web complements the Semantic Web by improving the quality and legitimacy of collaborative, goal-oriented discourses in communities."

So, the Pragmatic Web complements the Semantic Web; it does not replace it.  The Semantic Web is simply not enough and it's purpose is broad.  Better boundaries are required to "tame the beast"; to effectively harness the full potential of the internet and artificial intelligence.

In another blog post, Five Types of Systems, I compare and contrast the spectrum of different types or categories or layers of systems. Here is a summary of that analysis: (to best understand these systems it is best to understand this foundational terminology)

  • Symbolic systems define and constrain the identity and arrangement of symbols; they specify form, not meaning.
  • Structural systems organize and constrain symbols into models, schemas, and relationships; they add form, coherence, and internal logic to the symbolic layer.
  • Semantic systems map organized structures to concepts, relationships, and truth conditions; they add meaning, interpretation, and logical consequence to the structural layer.
  • Pragmatic systems ground semantic meaning in real‑world state, evidence, and operational change; they add truth‑in‑time, verification, and actionable reality to the semantic layer.
  • Cognitive systems interpret meaning in context, applying judgment, intention, and narrative understanding; they add purpose, evaluation, and human sense‑making to the pragmatic layer.

To understand pragmatic type systems or the pragmatic "layer" it is important to understand the entire spectrum or the "layers".

To understand the requirements of accounting, reporting, auditing, and analysis one needs to understand the essence of accounting. Core requirements are zero tolerance for error, trackability/traceability, provenance, clear accountability.

The notion of the Pragmatic Web imposes some restrictions, sets more appropriate boundaries, and supplements or augments the capabilities of the notion of the Semantic Web. As I can best articulate these ideas for my area of interest, which is accounting, what I see is the following gaps that need to be filled:

  • Semantic systems were not designed to be "timeless"; they provide no temporal capabilities of  "state" as of different points in time. Pragmatic systems do have temporal capabilities.
  • Semantic systems where not designed to specify or verify numeric relationships. Pragmatic systems do have these capabilities. For example, XBRL Formulas helps understand this capability.
  • Semantic systems do not provide an explicit multidimensional model. Pragmatic systems require this capability. For example, XBRL Dimensions helps understand this capability.
  • Semantic systems do not yet provide for what DataBook is trying to provide in terms of what I might call "dynamic processing instructions".  Pragmatic systems require this capability.
  • Semantic systems do not currently provide digital distributed immutable ledgers.  Pragmatic systems require this capability in many cases.
  • Semantic systems do not currently provide artifacts at the appropriate "level" for business professionals to work with. Pragmatic systems require this capability.  For example, the notion of the "digital information block" is an example of an appropriate level of abstraction.
Again, the Pragmatic Web builds on the Semantic Web; it in no way replaces it. The Pragmatic Web adds layers of capabilities on top of the Semantic Web.  The Semantic Web and the Pragmatic Web will coexist; each fulfilling a different set of needs.


The Pragmatic Web is where meaning becomes measurable, and semantics become operational. The Pragmatic Web will enable the creation of industrial processes which will optimal and reliable use of artificial intelligence in accounting, reporting, auditing, and analysis.

The Pragmatic Web is a platform upon a new ecosystem will be built for accounting, reporting, auditing, and analysis.

Additional Information:

Comments

Post a Comment

Popular posts from this blog

Reference Reporting Frameworks

Image
A financial reporting framework is a purposeful arrangement of financial line items, totals, subtotals, aggregations, disaggregations, structures, metadata, categorization, classification, assertions, restrictions, constraints, other conditions, etc. A financial reporting framework represented in a digital format should not be semantically impoverished. Leaving information out, consciously or unconsciously, is not desirable. These reference reporting frameworks provide the minimum of what is necessary. They are modest yet not impoverished. A financial reporting framework provides the elements necessary for reporting organized by basic line item element, superordinate elements, and subordinate elements organized by type per the process of classification .  Financial reporting frameworks tend to start with the high level concepts of the basic accounting equation: assets, liabilities, equity; and then build out from that basic accounting equation. The following are a set of reference ...
Read more

Accounting & Audit by Design (A&AD) Framework

Image
The Accounting & Audit by Design (A&AD) Framework is about freedom from drudgery for accountants, auditors, and analysts. It is about streamlining processes. A&AD is about eliminating the waste of time and energy that goes into transaction chasing . It is about eliminating the need to resort to things like " the plug ".  A&AD is about fixing processes that allow mistakes rather than spending time fixing mistakes a process allowed or dealing with the consequences of a mistake escaping from the system undetected. The following sections will help you understand what the Accounting & Audit by Design (A&AD) Framework is and what it enables. Environment What is A&AD? Why A&AD Now? How does A&AD Work? Business Outcome Fifty to seventy five year ago it would have been impossible to contemplate something like A&AD; it just was not feasible. We did the best we could to implement accounting information systems using computers and software that we...
Read more

Overview

Image
( Executive summary ) Innovation doesn’t arrive. Innovation evolves. Imagine it.  Freedom from drudgery. Freedom from the toil of tedious, repetitive, mundane, monotonous tasks. Far less time needs to be spent fulfilling the role of "data janitor".  Time spent "transaction chasing" is significantly reduced. Accounting is a well understood system which has evolved over many thousands of years. Accounting, reporting, auditing, and analysis is being digitized. This digitization will enable processes to be industrialized  and productivity boosts to be realized. If you are an accountant, auditor, or analyst it is time to update your tradecraft. This overview is an attempt to take the work that I have done to understand XBRL-based reports and back into a framework for explaining those reports, accounting and audit working papers, analysis models to accountants and software engineers building software for accountants.  I am now referring to this as model-driven reporting ...
Read more