# Introduction This is a continuously expanding information repository covering the operating system for global regulatory disclosure. ### Overview We developed the world's first artificial intelligence based regulatory disclosure infrastructure that provides proof of financial and operational state of economic entities and issuers of digital assets. The project is designed to raise the integrity and reliability of disclosure information for regulators, professional services firms and today's open ledger based investment society. So how do we do this? Through incentives for creators of disclosure models and disclosure controls as well as validators who verify that the models and controls work correctly. As the platform becomes more more adopted, it becomes the basis of an automated "operating system" for disclosure and analysis. As the world's assets become tokenized, accounting, disclosure, audit and analysis must undergo a radical transformation. As the world's accountants and professionals contribute models and controls, processes become more refined and disclosure becomes more reliable. The more precise the logic and data becomes, the more artificial intelligence can predict and estimate future outcomes on a micro and macroeconomic level. Sounds cool right? Its gets better. Instead of performing manual labor for hourly fees, the professional services community can build a portfolio of models and controls that earn revenue. Ok NOW professional services just became the sexiest profession on the planet! Finance and law are complicated subject matters and are sometimes difficult to articulate. We are working really hard to make it fun. Wherever and whenever we can, we will attempt speak plain English when discussing these matters. We also hope to add a sense of humor as well as a sense of humanity. Please be sure to join our [Discord](https://discord.gg/JbpFqKM3EM) server. We will stage periodic live discussions on the project and also the usual crypto banter. # External Validation Core Contracts The Heart of the Engagement Process for Financial Statement and Process Control Validation ### EVC Engagement If you are a reporting entity or wish to create controls that automate accounting, reporting, audit and analysis processes, you'll need to invite validators and create a cohort. BTW, until everyone in the accounting profession, especially regulators are comfortable with this new way of life, we call auditors "validators". Binding your cohort of validators begins your new status as a reporting entity on the protocol or your new life as a creator of Process Control NFTs. It all begins with an external validation contract "EVC" engagement. The EVC functions as a game theory incentive and trustless settlement layer with on chain community governance in a decentralized financial disclosure protocol ecosystem. A minimum number of validators must accept the requested engagement in order to bind your cohort of validators to the engagement. This minimum number is set through community governance. The "create cohort" function outputs a new engagement contract between all parties. The EVC identifies the unique engagement between the reporting entity or Process Control NFT creator and the cohort of independent external validators. ### Registration Action on the Auditchain Protocol begins with registration of a role along with the submission of a profile associated with that role. You'll need a [Web3](https://web3js.readthedocs.io/) wallet loaded with AUDT to begin. ### KYC/AML We would like to take this opportunity to apologize to all cypherpunks. All actors on the protocol MUST go through KYC/AML. We are asking auditors to do something they've never done before: blockchain based public attestation on all sorts of data and controls in exchange for a few cryptographic tokens, so be kind to them. Identify yourself and wash your wallet. This is one giant leap for the institution of accountancy. ### Submitting Evidence The cohort of external validators begins performing validations of each financial state transition of the economic entity. A state transition under most current regulatory disclosure frameworks usually happens once every quarter. The output of a financial state transition produces a [Merkle](https://www.blockchain-council.org/blockchain/what-is-merkel-tree-merkel-root-in-blockchain/) root of all of the data, logic and controls of a series of knowledge graphs and subgraphs, otherwise known as the financial statements. Since a financial statement is a series of multi dimensional knowledge graphs and subgraphs, we often refer to them as [Logical Systems](http://accounting.auditchain.finance/framework/LogicalTheoryDescribingFinancialReport.pdf). External validators running instances of Pacioli will validate each state transition and output a validated instance of the state transition which also contains a Merkle root of the validation. In addition, each attestation made by each of the external validators is recorded in the EVC contract. When consensus among the external validators is reached, the validation is also recorded in the EVC contract. All attestations as well as the validation of the state transition can be viewed in the validation history as well as TXIDs on the Polygon or Ethereum Network through each of their respective block explorers. ![](/files/-M_Yg0HkX9CM286hUHT9) Ok, the accountants are thinking; what are they talking about? What is a state transition? Think of an enterprise as a [state machine](https://blog.markshead.com/869/state-machines-computer-science/). In computer science, a state machine outputs changes in state for each input to an existing state. We think about economic entities as logical systems and state machines. We understand that you may be used to thinking about materiality when making assessments during audit procedure. However, in computer science, a state change is a state change if its one penny or one billion dollars. In the world of cryptography, the integrity of information is protected from tampering. A single character change reveals a break in the hash values that bind the integrity of the information. When the hash of the state transition and each validation match, it acts as proof of assurance (“PoA”) and triggers a call by the cohort EVC to credit AUDT to each validator in the cohort who attested to the state transition. The governing dynamics are designed to promote assurance levels on financial disclosure for any entity that theoretically match the integrity of the methodology with which transactions are validated on a public blockchain. Our [whitepaper](https://auditchain.finance/whitepaper-v1.pdf) describes the design and functionality of an Ethereum based gamified incentive settlement layer for actors on the Auditchain Protocol: a decentralized continuous audit and reporting protocol ecosystem for assurance and disclosure. It covers the functionality of Ethereum based core ERC20 factory smart contracts which enable an increase in assurance quality, auditor independence and objectivity, trustless settlement and the reduction of counterparty and regulatory risk. Operating together the EVC outputs a new contract address which binds an enterprise actor to an external validation agreement with a cohort of independent external validators, on an each and individual basis, when a minimum number of validators have accepted the requested engagement. # Financial State Validation The Digital Audit Engagement Agreement. ### External Validation Contract The ERC20 External Validation Contract "EVC" is designed to retain a cohort of validators for the purposes of financial state validation prior to publishing. It is also used for the validation of [Process Control NFTs](https://docs.auditchain.finance/auditchain-protocol/auditchain-core-v1/developers-of-process-control-nfts) to assure that they comply with specified functional objectives before they are published and used. The reporting entity or the creator of Process Control NFTs invite specific validators to the cohort. The validators accept the engagement and become members of the cohort. All activity in the cohort is passed to the members in a highly encrypted environment. ### ISAE 3402 Standard The [ISAE 3402](https://www.ifac.org/_flysystem/azure-private/publications/files/B007%202013%20IAASB%20Handbook%20ISAE%203402_0.pdf) standard is set by the IAASB and covers controls that affect financial reporting at a service organization. The EVC is designed to comply with this standard during an audit engagement that is scoped to cover controls at a service organization. ### CEAOB Mandates The Committee of European Auditing Oversight Bodies "CEAOB" adopted [guidance](https://commission.europa.eu/system/files/2021-11/211109-ceaob-esef-guidelines-auditors_en.pdf) in November of 2021 on the auditor's involvement on financial statements in the European Single Electronic Format "ESEF". The [CEAOB Guidance](https://commission.europa.eu/system/files/2021-11/211109-ceaob-esef-guidelines-auditors_en.pdf) requires auditors in the 27 member states of the EU to include the machine readable financial statement instance in the [ESEF format](https://www.esma.europa.eu/issuer-disclosure/electronic-reporting#:~:text=The%20European%20Single%20Electronic%20Format,comparability%20of%20annual%20financial%20reports.) within the scope of an audit engagement agreement. The EVC and the use by the auditor of the Pacioli Logic and reasoning engine is designed to fulfil the auditor's responsibilities to comply with this guidance when auditing financial statements of economic entities in the EU. ### Examples of SEC EDGAR Knowledge Graphs - Proving Financial State This is a link to a paper describing the attributes and functions of the composite of all financial reports filed with the Securities and Exchange Commission. We also cover functions relating to proof of financial state. {% file src="/files/DkPDWBNPIQHmP9MYfOZ4" %} # Process Control NFTs The "Lego Building Blocks" of Accounting, Reporting, Audit and Analysis - Moving the Institution of Accountancy Toward Automation ## What is a Process Control NFT? A Process Control NFT is an immutable, transferrable digital representation of a control that automates an accounting, financial reporting, audit or analysis process. A Process Control NFT uses the ERC721 standard on the Ethereum or Polygon blockchain, or other EVM chain. The ERC721 standard began its initial use case for representing art. Its use is rapidly expanding to music, media, event ticketing, memberships and more. Process Control NFTs represent the dawn of ERP, accounting and reporting infrastructure for the modern enterprise. The Auditchain Protocol is a representation of the first NFT use case for internal and external enterprise process automation, assurance and business intelligence infrastructure. We like to call them Lego Building Blocks for accounting, reporting, audit and analysis. Anyone can create a Process Control NFT so long as they have knowledge of these processes. Process Control NFTs are externally validated on the Auditchain Protocol. Every time they are used, the creator and the validators who validated them get paid a royalty. Neat, huh?

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### The Financialization of Professional Services A typical global 1000 enterprise spends a significant amount of shareholders' capital on consulting and advisory. These are valuable experts that build, fine tune and monitor the business processes and components that guide the trajectory of growth of an enterprise. Depending on the objectives of the enterprise, the annual costs for outsourced professional service are a delicate balance between capitalization, amortization and tax efficiency. At the end of the day these costs are sunk. The ROI is internally challenging to prove and even more difficult to communicate on a balance sheet. Financializing controls over business processes allows creators to "rent" them to others and receive a royalty per use. We call this "computational" or "decentralized professional services". An enterprise can operationalize and monetize what would otherwise be a sunk cost. A Process Control NFT is a digital asset, and is classified as an intangible under US GAAP - ASC350 and IFRS - IAS38. It is recorded at cost and can be impaired but accounting rules make it difficult to apply a higher fair value to a unique asset than it cost to create. So the question is, what is the fair value of a Process Control NFT? As a practical matter, the value of an asset can be a multiple of its actualized income or return on investment. ### Proforma Analysis **We are not providing accounting, reporting, audit or tax advice and this illustration should not be interpreted as such.** We postulate that Process Control NFTs have a potential to supercharge a balance sheet. The chart below illustrates an example of the impact on stockholders' equity over a 3 year period assuming, (i) capitalizing the total $400,000 cost in year 1 to create the Process Control NFTs, (ii) impairment of $100,000 for each of the two subsequent years, (iii) income from Process Control NFTs in each of the three years and, (iv) the realization of a gain on sale of the Process Control NFTs based on a 10X multiple of income in the third year. **AGAIN, this is ONLY an illustration.**
## Business Intelligence Data aggregation from regulatory agencies is hard. You can ask any CFA who works for an institutional investor. This makes business intelligence hard without subscribing to expensive centralized data aggregators. Process Control NFTs are a disruptive solution for extracting data from machine readable instance documents and creating controls that populate an investment thesis or business intelligence solution. Process Control NFTs can be used to create and automate analysis processes for individual and institutional investors. They can also be used to create business intelligence components. Again; If you can create an xls formula, then you can create a business intelligence or analysis Process Control NFT. ## Getting Started The Auditchain Protocol is initially equipped with an existing library of controls that automate financial reporting and financial report validation. These controls are based on the [XBRL Global Standard](https://www.xbrl.org/) Syntax. XBRL is the language and dialect of over 150 global regulators across 60 jurisdictions. The Luca Suite is where process controls are created. You can learn more about the [Luca Suite here](https://docs.auditchain.finance/luca-suite/overview-of-luca-suite). The Luca Suite features constraints to prevent users from making mistakes or applying incorrect logic. You can apply for and create an account on the private beta version of the [Luca Suite here](https://docs.auditchain.finance/luca-suite/getting-started). Control Element Categories are the artifacts used to create any type of financial reporting, audit or analysis control. You learn more about the [Control Element Categories here](https://docs.auditchain.finance/luca-suite/user-guide). Every accountant and CFA knows the accounting equation. Equity=Assets+Liabilities. This simple logic is the over arching control that governs all other accounting controls. Upon submission, [Pacioli](https://docs.auditchain.finance/pacioli/pacioli-logic-and-rules-engine) begins processing the output of the control in the form of one or more XML files containing all of the attributes of the control with a payload of the other URIs to other XML files that the control refers to in order to achieve the functional objective of the newly created control. All controls are immutably stored on IPFS with a unique identifier. ### External Validation The newly created control is then submitted to the [cohort of external validators](https://docs.auditchain.finance/auditchain-protocol/auditchain-core-v1/for-reporting-entities) running the AVM client; which we lovingly call "Pacioli" for validation under the [IASE 3402 engagement standard](https://www.ifac.org/system/files/downloads/b014-2010-iaasb-handbook-isae-3402.pdf). The control is processed by the external validators to verify that the control (i) works properly, (ii) does not conflict with or break other controls and (iii) complies with specified logical and functional objectives. When consensus of the cohort is reached that the control meets the conditions of the specified objectives, a validation is outputted and recorded by the [EVC](https://docs.auditchain.finance/auditchain-protocol/auditchain-core-v1). The EVC triggers the settlement in AUDT and also enables the creator to claim the Process Control NFT.

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### Attributes of Process Control NFTs The NFT represents ownership of the control and points to an immutable URI on IPFS. The payload of the file linked by the URI contains the control and all other relative URIs as well as metadata that states; the creator's name and Ethereum address, name of each of the external validators and their Ethereum address, the EVC cohort address and the Merkle root which is the basis of the Proof of Assurance, "PoA" for the control itself. The magic of this process and the use of the NFT format allows creators and validators to get paid each time the control is used on the Auditchain Protocol. This incentivizes the creation of more controls which enables financial and operational state automation. It also forms the basis for global disclosure frameworks to move from periodic, backward looking sprints to a continuous audit and near real time financial reporting framework that is suitable for an open ledger based investment society. ### Knowledge Graphs Proof of Assurance "PoA" is a critical piece of the knowledge graph populated during the control creation process. The control creation process populates a knowledge graph that associates all of the attributes of the control and includes the attributes in the metadata section of the control. As the controls are consumed by other actors, the knowledge graphs become extremely useful. Actors can create additional controls (subgraphs) that become part of other knowledge graphs created by them that play a critical role in communicating accounting, audit, financial reporting and analysis logic and information in a machine-readable way. The knowledge graph is also critical for reporting entities and auditors who are involved with financial statement audits in Europe which must include machine-readable data [prepared in the ESEF Format](https://www.esma.europa.eu/sites/default/files/library/esma32-60-254_esef_reporting_manual.pdf) as well as human readable rendering of financial statements under new [CEAOB guidelines](https://commission.europa.eu/system/files/2021-11/211109-ceaob-esef-guidelines-auditors_en.pdf). Congratulations! You are learning about [computational professional services](http://accounting.auditchain.finance/library/ComputationalProfessionalServices.pdf) that features consumable controls which you now own! Every time that new control is used, you and each of the members of your EVC cohort who attested to the effectiveness of the control will receive AUDT as a royalty. Do you REALLY want to perform manual accounting and analysis work for 10-12 hours a day for the rest of your career? Or do you want to come with us, get a life and change the world? ### # AUDT Token Description and functionality of the AUDT Token ## Introduction The AUDT Token powers the Auditchain Protocol, the world's first financial state disclosure and decentralized ["Proof of State"](https://blog.auditchain.finance/what-is-proof-of-state-77026845da46) external validation expert network. Integration with the Auditchain Protocol enables any reporting entity to communicate financial disclosure and provide proof of financial state to its stakeholder community. It also puts a reporting entity one click away from filing with 60 jurisdictions across 100 regulatory agencies. The community decides through [governance](https://docs.auditchain.finance/auditchain-protocol/governance), how many AUDT there will ever be in circulation. ## Token Generation Event The genesis of the [AUDT Token contract ](https://etherscan.io/address/0xb90cb79b72eb10c39cbdf86e50b1c89f6a235f2e#code)began with ZERO mint. As events occur, triggered by additional contracts, additional AUDT is minted. See [Vesting Contracts](https://docs.auditchain.finance/vesting-contracts/cliff-timeline). The maximum supply of AUDT minted will ultimately be decided by the community. In all cases, minting occurs when claims from sales and claims for rewards are made by actors on the Auditchain Protocol. On November 29, 2021 at 10:44PM UTC, we deployed a [child AUDT Token](https://polygonscan.com/token/0x91c5a5488c0decde1eacd8a4f10e0942fb925067) contract to Polygon. The parent AUDT Token contract on the Ethereum mainnet is mapped to the child contract on Polygon. The AUDT Token contract address on Ethereum is: [0xb90cb79b72eb10c39cbdf86e50b1c89f6a235f2e](https://etherscan.io/token/0xb90cb79b72eb10c39cbdf86e50b1c89f6a235f2e) The AUDT Token contract address on Polygon is: [0x91c5A5488c0dEcde1Eacd8a4F10e0942fb925067](https://polygonscan.com/address/0x91c5A5488c0dEcde1Eacd8a4F10e0942fb925067) ### AUDT Token Functionality **Staking** - A minimum amount of AUDT is needed to "**operate"** a [Pacioli Node](https://docs.auditchain.finance/auditchain-protocol/pacioli-logic-and-rules-engine). This amount is subject to governance. Anyone who holds a balance of AUDT can **"delegate"** their AUDT and "back" a Pacioli Node operator and earn passive income. **Settlement** **- Who Pays?** * Reporting Entities * Data Subscribers **Settlement - Who Receives Payment?** * Validators * Process Control NFT Creators AUDT is a settlement layer for all obligations on the Auditchain Protocol. Users may designate settlement in other forms of crypto payments. Users pay for access to the Luca Suite for Process Control creation, taxonomy, report model and financial disclosure development. Passing financial and operational state instances to external validators running Pacioli for validation requires settlement. Validators receive payment for fulfilling validation requests. Royalties are paid in AUDT to creators of [Process Control NFTs](https://docs.auditchain.finance/auditchain-protocol/auditchain-core-v1/process-control-nft) and are also paid to the validators who prove that the Process Control NFTs work correctly. Subject to governance, subscription payments by data subscribers who access premium levels of financial state are allocated between reporting entities, validators and the developers of the Auditchain Protocol. **Governance** - Monetary policy is set by the community of AUDT holders through adjustments to the amounts paid for each validation performed by validators. Changes in functionality are immediately invoked upon the passage of a vote on the following functions: * Changes to the amount of rewards paid to validators through protocol subsidies * Changes to the amount paid by the reporting entity * Changes to the allocation of proceeds from data subscriptions between reporting entities and the cohort of validators * Changes to the minimum staked balance required for continued compliance by a reporting entity (fair warning) * Changes to the minimum number of validators in a cohort * Changes to the minimum percentage of validators in a cohort required to achieve consensus ### Claim Contracts Contracts have been deployed that allow users who are entitled to AUDT to make claims. Please see [Vesting Contracts](https://docs.auditchain.finance/vesting-contracts/cliff-timeline). ### Minting Through Settlement The [EVC](https://docs.auditchain.finance/auditchain-protocol/auditchain-core-v1) calls the minting function of the AUDT Token contract. The EVC is the factory contract that outputs engagement contracts between each enterprise and its cohort of validators. The EVC is capable of six separate categories of assurance. At launch, each cohort for each category of assurance will require a minimum of 3 validators. This can be changed through [on-chain governance](https://docs.auditchain.finance/auditchain-protocol/governance). The number of AUDT minted for each validation by a cohort is set at launch and can be changed through [on-chain governance](https://docs.auditchain.finance/auditchain-protocol/governance). Please be sure to review our [whitepaper](https://auditchain.finance/whitepaper-v1.pdf) to gain a better understanding of the Auditchain Protocol and how additional AUDT is minted. # Governance Democracy is a full time job so don't forget to vote! The core contracts in this version feature on chain governance which allows the community of AUDT users to propose changes to be made to the protocol. The governance contract deployed in this version is a fork of [Compound](https://compound.finance/docs/governance). Proposals may be made through the delegation of a minimum of 1% of the number of AUDT in circulation to a delegate. A holder of AUDT may delegate to themselves or to another delegate. ### Member Contract The Member contract is the contract that governs the terms of the engagement between economic entities or curators and validators. The governance functions for engagements between economic entities, curators and validators allow the following changes: * Amount of rewards paid to validators through subsidies * Amount of rewards paid by the reporting entity with the amount emitted through subsidies * The percentage of the proceeds from data subscriptions allocated between economic entities and validators * Changes to the minimum amount of AUDT required to be on deposit for continued compliance by a reporting entity (fair warning) - This function provides a warning to the reporting entity to top up or add additional AUDT when the balance of a reporting entity account decreases to a certain level ### Cohort Factory Governance allows changes to the minimum number of validators in a cohort for each category of assurance. The initial number is set at three. ### Cohort Changes may be made to the percentage of validators in a cohort that are required to perform a validation in order for a validation to occur. # Staking Game theoretical incentives for raising financial and operational integrity and aligning external validation behavior. ### Validators Validators may operate one or more Pacioli Nodes or delegate to Pacioli Node operators. Validators are required to stake a balance of AUDT in order to act as a validator on the Auditchain Protocol. ### Process Control Creators Process Control creators must stake a balance of AUDT to act as a control creator on the Auditchain Protocol. Holders of AUDT may delegate to control creators and earn passive income each time controls are used. ### Reporting Entities Reporting entities must stake a balance of AUDT to gain access to the [Luca Suite](https://docs.auditchain.finance/luca-suite/overview-of-luca-suite). See the diagrams and subtext below for a summary of the Auditchain Protocol architecture. ### Auditchain Protocol Infrastructure
Auditchain Infrastructure - Learn More The diagram below illustrates the infrastructure of the Auditchain Protocol. The actors on the left are validators. Validators own and delegate AUDT to Pacioli Node operators on the right. They earn rewards for "backing" Pacioli Node operators. Validators may also run Pacioli Nodes. Pacioli Node operators operate instances of the Pacioli Logic Engine on the Auditchain Protocol and validate Process Controls, financial reports and financial report models to detect inconsistencies. They also earn rewards for each validation and share the rewards with validators who delegate AUDT. See [Pacioli Logic and Rules Engine](https://docs.auditchain.finance/auditchain-protocol/pacioli-logic-and-rules-engine).
![Auditchain Protocol Infrastructure](/files/ckLsnDu1W3Ju5t6UQlb8) ### Validators
The Role of a Validator - Learn More A validator is an actor on the Auditchain Protocol who delegates AUDT to Pacioli Node operators. A validator may also act as a Pacioli Node operator and delegate to themself. A validator can be anyone who holds AUDT in their wallet. Validators play a critical role in the incentive system for supporting and expanding the Auditchain Protocol infrastructure which is supported by Pacioli Node operators.
![Validators - Delegators](/files/FipTvFCx6lzfTiu7ptnU) ### ### Pacioli Node Operators
The Role of a Pacioli Node Operator - Learn More A Pacioli Node operator is an actor on the Auditchain Protocol who installs the [Pacioli Logic Engine ](https://docs.auditchain.finance/auditchain-protocol/pacioli-logic-and-rules-engine)and the Pacioli Agent on their own server. Pacioli Node operators make their instance of the Pacioli Logic Engine available on the Auditchain Protocol to detect and fulfill requests for validation. When a validation request is detected, the Pacioli Nodes "race" to compete with other Pacioli Node operators on the Auditchain Protocol to fulfil the validation request.
![Pacioli Node Operators](/files/668Liyr7sJQlJsw9OTtL) ### ### Beta Launch - Early Enrollment - NOW CLOSED This summary describes an overview of the functional objectives of the Pacioli Node staking contracts for validator early enrollment. This version is in Beta. Use at your own risk. You must have a Metamask wallet and be connected to Polygon mainnet. Delegating AUDT as a validator in this contract means that you are staking AUDT in an early enrollment period. It is reserved for those who wish to be among the first to become Pacioli Node operators or back other accountants and non-accountants who will run the [Pacioli Logic Engine](https://docs.auditchain.finance/auditchain-protocol/pacioli-logic-and-rules-engine) and node.js Pacioli Agent as a Pacioli Node operators on the Auditchain Protocol. The early enrollment period began on Monday 7 March, 2022 and it will end on 8 June, 2022 when the Pacioli Node infrastructure is deployed to Polygon mainnet. See [Terms and Conditions](#terms-and-conditions). ### **Security Audit** Check out our [Certik Skynet Dashboard](https://www.certik.com/projects/auditchain) and vote safe! ### Terms and Conditions The enrollment period began at 16:00 UTC on Monday 7 March, 2022 and will end at 05:00 UTC on 8 June, 2022. Rewards for early enrollment will be captured upon deployment of the Pacioli Node infrastructure on 8 June, 2022 or earlier. When the enrollment period ends you will be required to migrate your stake to the newly deployed Pacioli Node staking contract referred to as `MembersHelper.sol` You may examine the `MembersHelper.sol` contract [here](https://github.com/Auditchain/Core-Smart-Contracts-v1/blob/main/contracts/Auditchain/MemberHelpers.sol). After migrating your stake to `MembersHelper.sol` you may redeem your rewards. WARNING: If you redeem your AUDT during the early enrollment period, you will only be able to redeem the entire amount. You will also forfeit the rewards on the AUDT you redeem. Each address can only stake once during the enrollment period and you may only redeem the entire stake prior the expiration of the early enrollment period. [**ENROLL NOW!**](https://auditchain.finance/staking) ### Staking Demo Video
Read More Play the video to review the staking procedure. Did you read this entire page yet? If not please do so now.
{% embed url="" %} Auditchain Protocol Staking {% endembed %} ### FAQ
Frequently Asked Questions **Q: How long do I have to remain staked?** A: Until 8 June 2022. **Q: What happens on 8 June 2022?** A: You will be required to move your AUDT to the `MembersHelper.sol` contract. **Q: How do I move my AUDT to the MembersHelpers.sol contract?** A: You will be prompted to click a function that automatically moves your stake to the new contract. **Q: When do I receive my rewards?** A: After you move to the new `MembersHelpers.sol` contract you may redeem any amount of your stake and rewards. **Q: Do I still receive rewards if I redeem before 8 June, 2022?** A: You forfeit your rewards on the AUDT you redeem before 8 June, 2022. **Q: When will the new contracts launch?** A: `MembersHelpers.sol` will launch on 8 June, 2022. **Q: If I participate in early enrollment now, can I also operate a Pacioli Node?** A: Yes. You may also operate a Pacioli Node at any time after deployment. **Q: What is the reward for participating in early enrollment?** A: The rate for rewards will be 12%. You will earn .002 AUDT per day for each AUDT staked. **Q: What is the MembersHelpers.sol contract and how does it work?** A: The MembersHelpers.sol contract is the contract that allocates rewards among validators and Pacioli Node operators.
# Vesting Contracts Functional Specifications of Vesting for Adopters - PLEASE READ CAREFULLY ### PLEASE READ CAREFULLY - YOU CANNOT USE THIS FUNCTION AS A BRIDGE - YOU WILL LOSE YOUR TOKENS FOREVER ### Migration Launchpads and exchanges play a major role in the launch of all crypto projects. They contribute to the success of a project due to their ability to raise substantial amounts of awareness and promote adoption of each project by their users. In December, 2021, these service providers demanded the substantial reduction of the amount of AUDT in circulation. As the result, we deployed a token bridge that migrates all AUDT to new vesting contracts on Polygon. The functionality of the bridge creates an incentive system to facilitate the burn of all AUDT on Ethereum in a timely manner and complete the migration to Polygon. In addition, the bridge will automate the completion of a redesign of the AUDT Token metrics that meets the specifications of service providers and benefit our ecosystem as support for AUDT is added by service providers. ### PLEASE READ CAREFULLY BEFORE ACTING This section provides instructions to those who have not yet migrated. Some of the oldest HODLers do not watch our social media channels or pay attention to updates. Therefore, in order to protect them from hurting themselves and hurting the ecosystem, a lock was placed on all addresses that did not migrate by February 1, 2022. If you are unable to move your AUDT to the new vesting contracts on Polygon, please complete [**THIS FORM**]() as soon as possible. You will receive an email from **** containing detailed instructions for you to migrate to the new vesting contracts on Polygon. **WE WILL NEVER DM YOU FIRST. DO NOT FALL VICTIM TO DMs OFFERING HELP.** If your tokens were native to Ethereum you must [**CLICK HERE**](https://auditchain.finance/migrate) to migrate. If your tokens were native to Polygon you must [**CLICK HERE**](https://auditchain.finance/transfer-to-vesting-contract) to migrate. The next section describes each of the adoption classes in explicit detail. ### Adoption Classes There are three AUDT adoption classes and one Team class: * Early Adopters - 2017 - 2018 * New Adopters - 2021 * IDO Adopters - December 14, 2021 * Team - Vesting begins June 3, 2022 ### Vesting Cliff and Timeline There are three vesting cliffs: 1. Early adopters and private sale - Cliff begins December 3, 2021 2. IDO - Cliff begins March 7, 2022 3. Team and Advisers - Cliff begins June 3, 2022 ![Vesting Cliffs Timeline](/files/gPNI2TVdkRCyyLny4v2N) ### Early Adopters Early adopters purchased a total of 30,000,000 AUDT on Ethereum and received a 10% bonus for migrating. This class can now claim a total of 33,000,000 AUDT from the vesting contract. They may view their vesting statement by [connecting here](https://auditchain.finance/private-sale/claim) with their Metamask wallet address and clicking the Early Contributors tab. Vesting began on December 3, 2021. Vesting occurs equally, every day for 366 days. Early adopters may claim any or all vested amounts from the vesting contract during the vesting period. IF YOU CLAIM ANY AMOUNT, YOU WILL LOSE THE VESTING BONUS ON THE AMOUNT YOU CLAIM. Those who are entitled to vesting can access their [vesting statement and claiming dashboard here.](https://auditchain.finance/vesting) ### Vesting Bonus for Early Adopters Early adopters will receive a vesting bonus equal to 110% of the balance of AUDT in the vesting contract on day 366. The bonus is calculated by multiplying $$balance\*2.1$$ The bonus is designed to incentivize long term behavior. The bonus is reduced if claims are made on any vested amount prior to the expiration of the vesting period. **Example:** Alice bought 1000 AUDT. When she migrated, she received an additional 100 AUDT as a bonus for migrating and now has a total of 1100 AUDT in the vesting contract. In addition, if she leaves the entire 1100 AUDT in the vesting contract until day 366, she will receive a total of 2310 AUDT. This equates to an additional bonus of 1210 AUDT. If Alice claims 500 during the vesting period and leaves 600 in the contract, she will only receive a total of 1260 AUDT on day 366. ### New Adopters New Adopters purchased a total of 10,850,351 AUDT and received a 10% bonus for migrating. This class can now claim a total of 11,935,386.1 AUDT from the vesting contract. They may view their vesting statement and make a claim by [connecting here](https://auditchain.finance/private-sale/claim) with their Metamask wallet address and clicking the Private Sale tab. Vesting began on December 3, 2021. Vesting occurs equally, every day for 366 days. Private sale participants may claim any or all vested amounts from the vesting contract during the vesting period. IF YOU CLAIM ANY AMOUNT, YOU WILL LOSE THE VESTING BONUS ON THE AMOUNT YOU CLAIM. ### Vesting Bonus for New Adopters New adopters receive a bonus equal to 20% of the balance of AUDT in the vesting contract on day 366. The bonus is calculated by multiplying $$balance\*.2$$ The bonus is designed to incentivize long term behavior. The bonus is reduced if claims are made on any vested amount prior to day 366. **Example:** Bob bought 1000 AUDT. When he migrated he received an additional 100 AUDT for migrating and now has a total of 1100 AUDT in the vesting contract. In addition, if he leaves the entire 1100 AUDT in the vesting contract until day 366, he will receive a total of 1320 AUDT. If Bob claims 500 during the vesting period and leaves 600 in the contract, he will only receive a total of 720 AUDT on day 366. ### Team Vesting The team and advisers are currently granted 16,600,000 AUDT. All team members and advisers are subject to vesting. Vesting for all team members and advisers begins on June 3, 2022. All team members and advisors vest equally every day over 365 days. Any team member or adviser may claim any or all vested amounts from the vesting contract during the vesting period. No claims may be made by any team or adviser until June 3, 2022. The formula for vesting for all team members and advisors is : $$Allocation/365$$ No bonus is added to the vesting contracts for the team and advisers. ### IDO IDO adopters purchased a total of 1,000,000 AUDT. They received 100,000 AUDT on March 7, 2022. The remaining 900,000 vests equally every day until March 7, 2023 with no bonus. # Overview of Luca Suite Financial and Operational Disclosure Automation Infrastructure LucaSuiteTM is the basis for, and is the first implementation of the [Standard Business Report Model](https://www.omg.org/spec/SBRM) "SBRM" specification adopted by [Object Management Group](https://www.omg.org/) "OMG". [SBRM](https://www.omg.org/spec/SBRM) is a bi-directional, structured data agnostic logical interchange specification developed by Auditchain Labs AG and supported by a wide variety of other OMG member organizations. LucaSuiteTM is comprised of financial and operational disclosure automation infrastructure that is suitable for issuers of digital assets. LucaSuiteTM features logical constraints to achieve accurate, truthful and compliant structured financial disclosure development without the need for outsourced external structured data experts. LucaSuiteTM enables the creation of: * Model based disclosure capture by regulatory agencies * Machine-Readable Crypto Asset White Papers * Internal Controls over Financial Reporting * Machine-Readable Financial Reporting Models * Machine-Readable Financial Statements * Machine-Readable Reporting, Audit and Analysis [Process Controls](https://docs.auditchain.finance/auditchain-protocol/auditchain-core-v1/process-control-nft) ## Model Based Automation Financial and operational disclosure is a time consuming manual process. LucaSuiteTM enables the assembly of knowledge and logic based financial reporting models that are re-used for automating financial disclosure every reporting period. Model based assembly automatically picks terms and definitions from USGAAP, IFRS and most other reporting scheme taxonomies. Model assembly constrains financial report logic, data and structure. Tagging is automated and accurate which eliminates inconsistencies that are common in most structured disclosure development. Best of all, you can't make mistakes because LucaSuiteTM is the expert so you don't have to be. Some of the benefits of a model based approach include: * Repeatable production * Substantial reduction of preparation time * Streamlined automation * Effective internal controls over financial disclosure * Reduced external audit costs ## Non Technical Users All the complexity inherent in structured financial data disclosure is under the hood in a similar way that website content management systems use HTML and CSS constraints under the hood to automate site development so you don't have to be a developer. You do not need to be a structured data expert or a developer to create beautiful high quality machine-readable crypto asset white papers or accurate and compliant financial and operational disclosures. Using LucaSuiteTM means that CFAs can now extract and aggregate accurate and consistent financial statement data that has rich meaning and context. The [user guide](https://docs.auditchain.finance/luca-suite/user-guide) contains all the information and video tutorials you need to get started! # Getting Started This is a step by step guide to the private beta of the Luca Suite for financial disclosure automation infrastructure. The Luca Suite is still in development and should not be used commercially. ### STEP 1 - Go to: [https://dev.pacioli.ai]()
### STEP 2 - Select "Register" Select "Register"
You can login to Auditchain Suite using Web2 methods such as Google and Web3 methods such as Metamask. ### STEP 3 - Complete and verify registration
### STEP 4 - Login to the Luca Suite
### STEP 5 - Select Luca
### STEP 6 - Dashboard You will be taken to the main dashboard of Luca which contains a list of reports that you have created. Because you have not created any reports, your list of reports will be empty.
### STEP 7 - Create a white paper Press the green “+” button in the top menu and you will be prompted to add a new report. Type in the name of the report you would like to create such as “MiCA White Paper” into the Report name text box. Then press the “Create a report” button.
### STEP 8 - Create the white paper by loading an existing template. There are many approaches that can be used to create a white paper or a report. Automation occurs via API. You can manually enter information or import information from a reporting scheme template. In this case, we will choose an existing template or "model". Select “Create report by loading template from financial reporting scheme library and clock "Start Now".
### STEP 9 - Select the MiCA Prototype Select the MiCA Prototype and click next.
### STEP 10 - Import and select Select each of the elements you need in the list of elements on the right. Depending on what type of crypto asset your white paper describes, you will choose the elements in one of the Annexes. Annex I is used for crypto assets other than Asset Referenced Tokens or E-Money Tokens. In this case we choose elements in Annex I which is used for a utility token. Then click next.
### STEP 11 - You are ready to compose your white paper. You can now use each of the elements on the right to compose the relevant information. Be sure to save your work before moving on to the next element.
### STEP 12 - Validate Press the “Validate” button in the upper right-hand corner and select “Local Validation”. This is useful for internal audit functions to verify compliance internally. When the report validation is complete you will see the following:
### STEP 13 - Print to iXBRL. Its that simple! When you have completed and validated your white paper, click the blue "Generate" button on the top right and choose iXBRL.
### STEP 14 - Enter the information required in the dialogue box. A dialogue box will pop up after you click generate>iXBRL. Enter the information required in each of the data fields then choose the style sheet and click "Publish".
### YOU ARE LIVE! - Here is a sample of a beautiful high quality machine readable white paper! [**CLICK HERE**](https://dev.auditchain.finance/storage/d86235dd-9c07-4e73-bb3a-77cec2ee6e5c/ba2803aa/ixbrl-report-viewer.html)
{% embed url="" %} # Collaboration Add teams to your workflow Now you can share and work with legal counsel, accounting, engineering and your ESG teams on the same disclosure model and each disclosure. The collaborative features revolutionize compliance processes by enabling real-time multi-user editing, automated version tracking, and integrated feedback loops.
These tools save time through streamlined workflows, eliminating sequential reviews and reducing turnaround from days to hours. Cost savings arise from minimized manual labor and avoidance of costly compliance fines. Errors are eliminated via collective scrutiny and audit trails, while risks diminish through enhanced accuracy, traceability, and proactive issue resolution. # User Guide This user guide and the report element categories described below relate to the legend on the bottom right corner of the Auditchain Luca Suite application. ## Overview Accounting systems are great for recording and containing accounting information but they all have shortcomings when it comes to creating accurate, consistent and compliant structured financial disclosure. Just ask the CFO or controller of any economic entity. Extracting information from financial statements is even more challenging due to inconsistent information and terminology inherent in traditional methods. Just ask any CFA at any investment manager. There are a variety of financial report element categories that play a critical role in relating and constraining all of the logic and data contained in a digital financial report created in the Luca Suite. These elements are the tools that you will use to create your financial reporting "model". You can also think of these elements as knowledge assemblies or [process controls](https://docs.auditchain.finance/auditchain-protocol/process-control-nft). Once you assemble your financial reporting model using the tools in the Luca Suite, you will be able to "stream" accurate, consistent and compliant digital financial statements no matter what financial reporting scheme you comply with or which regulators, if any you file with. It is our goal that ***anyone*** who gains an understanding of the utility of each of these tools and their functionality will be able to automate the creation of accurate, consistent and compliant structured digital financial statements no matter what your background is. Please don't feel intimidated. Luca is the expert so you don't have to be! ## Structure
Structure Icon

Structure Icon

A structure is a technical artifact used to separate associations into distinct structures within a digital financial report, aiding in organization and clarity. An example of a single structure would be a balance sheet. In our world, a balance sheet is a multidimensional machine-readable knowledge graph for communicating and extracting accounting information. Imagine the possibilities! WATCH DEMO VIDEO ## **Hypercube**

Hypercube Icon

A hypercube is an abstract scheme representing related information with multiple dimensions, enabling structured representation of complex financial data for better analysis and reporting. Within a financial statement, a hypercube is used to present complex information, like a multidimensional breakdown of revenue by product category, geographical area, and time period. It enables comprehensive analysis and comparison. Great for the CFAs! WATCH DEMO VIDEO ## Dimension

Dimension Icon

A dimension is a defining characteristic or aspect of financial data that provides additional context or categorization. It adds depth to the structure by introducing various perspectives through which reported facts can be analyzed. Consider a financial report where revenue is reported. By adding a "Geographic Area" dimension, the revenue data gains context. This dimension might include values like "North America," "Europe," and "Asia," offering a breakdown of revenue based on geographical regions. Analyzing revenue with this dimension allows for better insights into global performance. WATCH DEMO VIDEO ## Member

Member Icon

A member is a specific value or instance within a dimension. It provides granularity to the dimension by representing individual categories or options. Imagine a financial report detailing sales. Within the "Product Category" dimension, "Electronics" is a member. This member allows for a detailed breakdown of sales specifically related to electronic products. Analyzing sales with this member provides insights into the performance of electronics within all of the product categories. WATCH DEMO VIDEO ## **Line Item**

Line Item Icon

In financial reporting, a line item represents a specific entry or element within a financial statement, such as revenue, expenses, or assets. It serves as a fundamental building block for presenting financial data in a structured manner. Consider an income statement where "Net Income" is a line item. This line item consolidates various revenue and expense components, providing a comprehensive view of the company's profitability. Analyzing "Net Income" across reporting periods allows stakeholders to assess the overall financial performance of the business. WATCH DEMO VIDEO ## **Abstract**

Abstract Icon

An abstract element is a concept that serves as a placeholder or grouping mechanism without representing an actual reported value. It helps organize and structure information within a taxonomy. Consider an XBRL taxonomy that includes an abstract element called "Operating Expenses." This abstract element groups various specific expense items like salaries, utilities, and rent. While "Operating Expenses" itself doesn't have a reported value, it organizes related concepts, aiding in a standardized and logical representation of financial data across reports. WATCH DEMO VIDEO ## **Numeric Concept**

Numeric Concept Icon

A numeric concept represents a unique idea or accounting item within a financial reporting scheme taxonomy. It serves as a standardized definition for a specific financial element. In a financial report, the "Cash" concept represents the amount of cash held by a company. By consistently using the "Cash" concept across various reports, stakeholders can easily understand and compare the cash position of different entities. This standardization enhances transparency and facilitates accurate financial analysis. Ask a CFA how they feel about extracting data from financial statements created using existing standard specifications. ## Non Numeric Concept

Non Numeric Concept Icon

A non-numeric concept represents information that is not expressed as a numerical value. It is used to capture and communicate non-quantitative data or textual information. An example of a non-numeric concept is "Accounting Policies." Instead of representing a numerical value, it encapsulates textual information describing the principles and methods applied in financial reporting. This non-numeric concept enhances the completeness of financial disclosures by including qualitative details about a company's accounting practices. WATCH DEMO VIDEO ## **Block**

Block Icon

A block is a logical artifact with identifiable patterns within a digital financial report, representing structured data. Blocks are associated with disclosures and organized within structures and hypercubes. Blocks represent specific elements within a financial report, such as individual line items on a balance sheet or income statement, enabling concise categorization and analysis. Also great for the CFAs. WATCH DEMO VIDEO ## **Fragment**

Fragment Icon

A fragment is a part or section of a financial report represented within a structure or hypercube, providing specific details or breakdowns of information for analysis and disclosure. A fragment within a structure might focus on a specific aspect, like a fragment detailing expenses related to a particular product line or region within the overall financial report. WATCH DEMO VIDEO ## **Text Block**

Text Block Icon

A text block is a structured component containing textual information in a financial report, providing context and explanations for reported facts. Within a financial statement, a text block contains required items such as the notes to the financial statements, explanations or descriptions of accounting policies, new accounting pronouncements from accounting standard setters and parentheticals giving context to reported facts for better understanding. WATCH DEMO VIDEO ## **Disclosure**

Disclosure Icon

A disclosure is a structured representation of financial information within a hypercube or other structure, providing details about specific aspects such as comprehensive income, balance sheet, or changes in equity. A disclosure represents a specific section of a financial report, like the comprehensive income statement, providing a structured view of a company's financial performance. WATCH DEMO VIDEO ## **Combined Disclosure**

Combined Disclosure

A combined disclosure is an integrated representation using both unique hypercubes and disclosure specifications, offering a comprehensive and structured view of financial data to support analysis and reporting. Combining various disclosures into a single comprehensive report, such as integrating the balance sheet, income statement, and cash flow statement, offers a holistic view for analysis and decision-making. WATCH DEMO VIDEO ## **Unrecognized Disclosure**

Unrecognized Disclosure Icon

A structure that lacks clear identification or specification, making it challenging to refer to or integrate into standardized reporting practices, possibly leading to ambiguity, inefficiencies and worst of all, inconsistencies. Luca doesn't use these elements. However, they are present in a large number of financial statements. We just wanted to see if you were paying attention and to also give you some context so you can see the difference between precision constraint modeling assembly featured in the Luca Suite and the way the rest of the world prepares financial statements. If you REALLY want to see what that looks like from quantitative view, [CLICK HERE](https://www.google.com/maps/d/u/0/viewer?mid=1ngTp2P_msi4PsOgD9NMglXEQlDZ1Ot4\&ll=38.27444194953174%2C-95.54074285421916\&z=4). You don't want to end up on THAT map! ## Closing Summary The Luca Suite is the first implementation of the [OMG Standard Business Report Model](https://www.omg.org/intro/SBRM.pdf) technical specification in which Auditchain Labs was a main contributor. The philosophy behind this specification and the goal of the Luca Suite lends itself to strengthening compliance with internal controls over financial reporting best practices recognized by auditors and regulators around the world under the [COSO Framework](https://www.coso.org/guidance-on-ic). Luca Suite uses XBRL based logical constraints under the hood in a similar way that website content management systems use HTML and CSS constraints. Imagine where the web would be without a CMS! You DO NOT need to be a structured data expert or a developer to originate pristine financial and operational state disclosure instances. The Luca Suite is designed to move structured financial reporting from an outsourced task to an internal process well within the internal control framework. For the benefit of investors, regulators, government agencies and central banks, it is our goal that all economic entities will adopt the Luca Suite to internalize, gain control of and raise the integrity and reliability of global business and financial disclosure. # API Documentaiton # Pacioli AI Logic and Rules Engine Pacioli: An AI logic and reasoning engine for financial and operational state external validation. ### **Pacioli AI Infrastructure** Pacioli is the heart of the Auditchain Protocol infrastructure for artificial intelligence (AI) based financial and operational state external validation and information extraction. Pacioli is built with [SWI PROLOG](https://www.swi-prolog.org/), a proven standard and robust logic programming engine. Pacioli is a declarative artificial intelligence-based logic and reasoning engine that reads, understands, and detects inconsistencies in machine-readable financial statements prepared in accordance with International Financial Reporting Standards, United States Generally Accepted Accounting Principles, and other standardized financial reporting schemes. Pacioli is purpose built and understands global standard XBRL-based reporting scheme taxonomies, digital financial report models and financial reports. Both API and GUI interfaces are available for Pacioli. A demo is available as an XBRL-based financial report verification toolkit, see [**Pacioli Power User Tool**](https://pacioli.auditchain.finance/tools/PowerUserTool.swinb) ### Real World Use Case Pacioli is the network client software application on the Auditchain Protocol that understands the logic of financial reporting and the meaning conveyed by such financial reports that are represented using the XBRL global standard technical syntax. Pacioli provides proof that XBRL-based financial reports are complete, consistent, and precise. Pacioli also detects internal control compliance. Internal controls are critical to a well functioning operating entity. Cryptographic reinforcements are read by Pacioli to determine if they have been tampered with or circumvented. This [demo page](https://auditchain.infura-ipfs.io/ipfs/QmQB17k7ccp2m8NTLwyzmkTK8tJjZZea1vg54FgdsjJvC1/) is an output of a batch analysis of each of the S & P 100 annual reports filed with the Securities and Exchange Commission for all of the 100 reporting entities that comprise of the S & P 100. ### State Condition Compliance with each internal and disclosure control is color coded for easy identification and remediation.
### Pacioli AI Agent - Web3 Enabled Pacioli can be deployed to perform tasks that are consistent with [CEAOB](https://commission.europa.eu/system/files/2021-11/211109-ceaob-esef-guidelines-auditors_en.pdf) guidance for auditors in the European Union and as a Web3 tool to validate the articulation of the financial state of an operating entity or financial intermediary in machine-readable form, based on their financial reporting style within a financial reporting scheme. The Pacioli Agent is a node.js application integrated with the Pacioli logic engine. Running a Pacioli Node on the Auditchain Protocol requires the Pacioli Agent which is included in a Docker image. The Pacioli Agent uses an algorithm designed to detect financial state validation requests from users on the Auditchain Protocol. Upon detection, the Pacioli Agent initiates a race to compete to fulfill validation service requests on the Auditchain Protocol. The Pacioli Agent also governs how consensus is reached by Pacioli node operators on the validation of financial state on the Auditchain Protocol. The Pacioli Agent also allocates the rewards to the winning validator and to Pacioli Nodes that reach consensus on compliance with internal controls and disclosure controls across standardized rules. ### Logic Based Pacioli uses machine-readable controls and deductive reasoning to determine if internal controls are in compliance and if an XBRL-based financial report is a properly functioning logical system. The following is a brief overview of the logic currently understood by the Pacioli software application which gives you an idea of the current capabilities of Pacioli: * **XBRL Syntax**: First you have to be sure that the technical format used to deliver the meaning conveyed follows the prescribed technical specification, in our case the XBRL technical syntax. * **Report Model Structure**: The report model created by the accountants representing a financial report needs to follow a prescribed logical structure for such report models. XBRL does not specify these rules. But good practices and logic does specify what is and is not permitted and Pacioli enforces these good practices. * **Report Mathematics**: Financial reports need to foot and cross cast; and ‘tick and tie’ mathematically. Pacioli performs this part of XBRL technical syntax verification. * **Relations between financial report line items**: Reported financial line items need to have the proper relations with other financial report line items within the report. Sometimes referred to as “wider-narrower” relations or “general-special” relations, Pacioli performs this function. * **Fundamental Accounting Concepts Continuity Cross Checks:** Pacioli reveals contradictions and inconsistencies between reported financial line items in a financial report. Pacioli helps you make sure you don’t inadvertently miss these accounting details. * **Disclosure Mechanics:** Each disclosure provided within a financial report requires a pattern and number of required disclosures. Pacioli performs the function of validating the disclosure mechanics of a financial report. * **Reporting Checklist:** Pacioli validates a reporting checklist to verify that reports are compliant and complete. Sometimes these reporting checklists can be very extensive. While Pacioli does not automate the reporting checklist completely, it does provide a significant level of automation in this regard. * **Internal Controls:** Pacioli detects compliance with implemented internal controls as well as internal control over financial reporting in order to detect and preserve the integrity of financial state. The Auditchain Protocol and "Pacioli Agent" is a decentralized application and provides the Pacioli Node Infrastructure for **Pacioli Node Operators**. Pacioli leverages the open source [**Arelle**](https://arelle.org/arelle) XBRL processor and validation is provided for the base specification of XBRL 2.1, Dimensions, Inline XBRL, Generic Linkbases, Unit Types Registry, U.S. SEC Edgar Filer Manual, IFRS Global Filing Manual and HMRC, CIPC and ESMA Filing Checks. ### Backwards Compatible The Auditchain Protocol is also used for private companies and issuers of digital assets. Pacioli financial report validation is backwards compatible. This means that once implemented, users are one click away from filing with regulators in any jurisdiction that mandates XBRL based financial reporting. ### **Pacioli Toolkit** * [Accounting Equation](http://accounting.auditchain.finance/demonstrations/ae/index.html) * [FASB's SFAC 6, Elements of Financial Statements](http://accounting.auditchain.finance/demonstrations/sfac6/index.html) * [SFAC 6 PLUS (includes Net Assets = Assets - Liabilities)](http://accounting.auditchain.finance/demonstrations/sfac6plus/index.html) * [Common Elements of Financial Report (Four Statement Model)](http://accounting.auditchain.finance/demonstrations/common/index.html) * [MINI Financial Reporting Scheme](http://accounting.auditchain.finance/demonstrations/mini/index.html) * [PROOF](http://accounting.auditchain.finance/demonstrations/proof/index.html) # Security Audits ### [Pecksheild](https://auditchain.finance/Peckshield-Audit-Report.pdf) ### [Certik ](https://www.dropbox.com/s/ulv2nnc4x65c2f9/REP-Auditchain-audit__final-20220307T060640Z.pdf?dl=0) ### [Certik Skynet ](https://www.certik.com/projects/auditchain) # Knowledge Base Resources for understanding, implementing and automating modern accounting, reporting, auditing, and analysis model assemblies and processes in a decentralized environment. ## About This Volume This knowledge base is under constant upgrades and improvements. It is the evolution of many years of study and practice. Pacioli.ai is a decentralized version of proven methods and applications using global standards for the computation and articulation of changes in state for economic entities. You are free to use any of the controls in the financial reporting schemes below as they are open source. We make no representation on the functional objective of these controls and give no warranties. ## Accounting, Reporting, Auditing, and Analysis in a Digital Environment ### Theory, Framework, Method, Principles What is conspicuously lacking in most people's mind is a broad framework let alone a theory on how to think about digital financial reporting. We provide that framework and theory. * [Logical Theory Describing Financial Report](http://accounting.auditchain.finance/framework/LogicalTheoryDescribingFinancialReport.pdf) * [Framework](http://accounting.auditchain.finance/framework/OpenSourceFramework.pdf) * [Method](http://accounting.auditchain.finance/framework/MethodOverview.pdf) * [Principles](http://accounting.auditchain.finance/framework/Principles.pdf) * [Essence of Accounting](http://xbrlsite.azurewebsites.net/2020/Library/EssenceOfAccounting.pdf) ### Technical Implementation Details The following are technical details used to implement XBRL-based digital financial reporting using theory, framework, method, and principles. * [Conceptual Model](http://accounting.auditchain.finance/cm/index.html) * [Standard Business Report Model (SBRM)](http://accounting.auditchain.finance/sbrm/index.html) | [Universal Digital Financial Reporting Framework](http://accounting.auditchain.finance/udfrf/index.html) * [Conformance Suite](http://accounting.auditchain.finance/conformance/index.xml) * [PROOF BASELINE Reporting Scheme](http://accounting.auditchain.finance/reporting-scheme/proof/documentation/Index.html) ### Financial Reporting Schemes Human-readable and machine-readable financial [reporting schemes](http://accounting.auditchain.finance/reporting-scheme/index.html) are implemented using the good practices method. This machine readable metadata is used within the [Luca Suite](https://docs.auditchain.finance/luca-suite/overview-of-luca-suite) and the [Pacioli logic and Reasoning Engine](https://docs.auditchain.finance/pacioli/pacioli-logic-and-rules-engine) to constrain rules-based artificial intelligence for articulating financial and operational state. * [Proof Baseline Reporting Scheme](http://accounting.auditchain.finance/reporting-scheme/proof/documentation/Index.html) * [MINI Financial Reporting Scheme](http://accounting.auditchain.finance/reporting-scheme/mini/documentation/Index.html) * [XASB Financial Reporting Scheme Good Practices Prototype](http://accounting.auditchain.finance/reporting-scheme/xasb/documentation/Index.html) * [Personal Financial Statements](http://accounting.auditchain.finance/reporting-scheme/pfs/documentation/Index.html) * [Not-for-Profit (US GAAP) Financial Reporting Scheme](http://accounting.auditchain.finance/reporting-scheme/nfp/documentation/Index.html) * [FRF for SMEs Financial Reporting Scheme (AICPA)](http://accounting.auditchain.finance/reporting-scheme/frf-sme/documentation/Index.html) * [International Public Sector Accounting Standards (IPSAS) Financial Reporting Scheme](http://accounting.auditchain.finance/reporting-scheme/ipsas/documentation/Index.html) * [International Financial Reporting Standards (IFRS) Financial Reporting Scheme](http://accounting.auditchain.finance/reporting-scheme/ifrs-full/documentation/Index.html) * [US GAAP Financial Reporting Scheme](http://accounting.auditchain.finance/reporting-scheme/us-gaap/documentation/Index.html) ### Fundamental Accounting Concepts Fundamental accounting concepts relations continuity cross checks. * [Fundamental Accounting Concepts](http://accounting.auditchain.finance/fac/Index.html) ### Learning about XBRL-based Digital Financial Reporting “If I had asked people what they wanted, they would have said faster horses.” Henry Ford. * [Computational Professional Services](http://accounting.auditchain.finance/library/ComputationalProfessionalServices.pdf) * [Essence of Accounting](http://xbrlsite.azurewebsites.net/2020/Library/EssenceOfAccounting.pdf) * [Gentle and Cheap Introduction to XBRL-based Digital Financial Reporting](http://xbrlsite.azurewebsites.net/2020/introduction/GentleIntroduction-Tutorial.pdf) * [Essentials of XBRL-based Digital Financial Reporting](http://xbrlsite.azurewebsites.net/2021/essentials/EssentialsOfXBRLBasedDigitalFinancialReporting.pdf) * [Very Basic Examples of XBRL-based Reports](http://accounting.auditchain.finance/examples/index.html) * [Mastering XBRL-based Digital Financial Reportin](http://accounting.auditchain.finance/mastering/Contents.html)g # References Below is a list of useful references, articles and videos on the use of structured data for financial reporting, disclosure and investment analysis. ### [CFA Institute - Why XBRL Data Matters for Investors, with Sandy Peters, head of Financial Reporting Policy](https://rpc.cfainstitute.org/en/research/surveys/2023/report-on-the-use-and-digitalisation-of-issuer-data) ### [SEC EDGAR Knowledge Graphs](https://files.gitbook.com/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MTcBaZfgA6Ge46uqCCB%2Fuploads%2FTTSfJEjC2qkLDgMQidlc%2FSEC-EDGAR-Knowledge%20Graph.pdf?alt=media\&token=18a2df9e-93fe-491e-b7ae-83b017bc4805) ### ### # Acknowledgements Individuals who have made significant contributions to Auditchain over the years and continue to contribute to this project. This knowledge base is the basis of an ecosystem that we hope will incentivize and motivate the world's CPAs, Chartered Accountants, CFOs, Controllers and CFAs to contribute and move the accounting and audit profession toward automation and true transformation. We wish to recognize some of the folks who have made significant contributions to the institution of accountancy, this project, and specifically, to this knowledge base. Digital financial reporting is a relatively new science. Believe it or not, modern financial reporting and Bitcoin are relatively the same age. Just before Satoshi Nakamoto published the Bitcoin Whitepaper in 2008, Charles Hoffman, a CPA from Tacoma, Washington in the USA was cooperating with a few US regulatory agencies to launch a new syntax for communicating accounting and financial reporting data in a machine readable way. The eXtensible Business Reporting Language, [XBRL](https://www.xbrl.org/) is now a global standard in over 60 jurisdictions across 200 regulatory agencies for financial and business reporting. We wish to recognize Charlie for his significant contribution to the [knowledge base](https://app.gitbook.com/@audt/s/auditchain/~/drafts/-MZFp2E8FVFlIpg1W5FM/accounting-reporting-auditing-and-analysis-in-a-digital-environment) and for his service as Product Manager for Auditchain Labs AG. It is Charlie's work that has been at the center of the financial reporting world for public company financial reporting. As we move forward, it is our goal and the goal of the [DCARPE Alliance Association](https://dcarpe.org) to automate the science of accounting, financial reporting, audit, and analysis as well as educate, motivate and incentivize business professionals to join us on the journey toward transformation. We also wish to thank the following individuals who have made significant contributions to Auditchain over the years and continue to contribute to this project: Scott Price, CPA, CISA, CIA - Founder and CEO of Align. Scott received the first call in 2017 after that eureka moment and became the first member of the DCARPE Alliance Association. Andrew Noble, PNA BBus - Founder of LodgeIT Christian Dreyer, CFA - Chairman, DCARPE Alliance Association, Board Member of XBRL Switzerland and former CEO of CFA Society Switzerland Bogdan Fiedur - Lead Blockchain Engineer, Auditchain Labs AG Chris Jastrzebski - Front End UX/UI, Auditchain Labs AG Stuart Haber PhD. - Former Chief Scientist, and Co-inventor of the first chain of blocks. Cited three times with Scott Stornetta in the Bitcoin Whitepaper. Could be the real Satoshi. Eric Cohen, CPA - Co-founder XBRL To all who have financially supported this project and stuck it out through thick and thin. We are humbled by your patience and have been working feverishly to deliver true disruption. We especially want to thank our detractors. You know who you are. Without you, we would never have mustered the determination to win! We will be constantly updating this repository so be sure to return to see our progress. If you are a CPA, Chartered Accountant, CFO, Controller or a CFA, [join us](mailto:support@auditchain.com) on the journey into the future of financial disclosure and assurance. This volume will become your new best friend. For product, technical or emotional support, please join our [Discord](https://discord.gg/JbpFqKM3EM) server.