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Technology isn't the issue per se - accounting fraud happens even with paper-based books. Fraud is a quality of humans, not technology. In so far humans will always look for a low energy path to everything, there will always be fraud regardless of the technology.
Technology does have the ability to "oil the works". One solution is to simply stop, which Walter seems to advocate: 'let's take a "stasist" strategy of no adoption.' Being a "dynamist" by nature, I reject that strategy without argument or justification.
To address the real issue though we could change the question to: do those who rely on technology have checkpoints, validations and processes for detecting problems. What could be put in place? Is the "system" self-correcting? Correction need not be technological. This is the role of legal, sociological and economic systems.
While using XML for financial reporting could encourage fraud, XML would also enable automated "sanity checks" to be applied which can't be done now with standard SEC, et al. filings, even the so-called XML ones. Being able to cook the books and make things fishy actually becomes *more difficult* with XML filing!
Of course, someone could outright lie with a complete set of consistent books that have no connection to reality, but you can do that today especially if your auditor chooses to overlook it. Outside boundary data will trip that up eventually. Not a technology issue.
There is naturally an issue of semantic dissonance: I mean this tag is this while you mean it to be that. Well, yeah, but look at accounting in general - very loosy-goosy by Techie standards. But that's the story of all human communication regardless of technology .
Will semantics be a source of friction? Yes, until we can connect our brains directly, but most cognitive theories suggest that wouldn't help anyway. In other words: it comes with the territory; we have to just deal with it. Compared to what passes for filings today, it's all up from here!
J
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