FINANCE

FINANCE = FINANCIAL_STANDARD × CANONIC = Structure(financial) × (C1, C2, Temporal, Relational, C5) = owned financial vertical

FINANCE = C1 ∩ C2 ∩ Temporal ∩ Relational ∩ C5 ∩ C6 = ENTERPRISE (#63)

Finance requires full Enterprise because:

• C1: Financial statements make claims
• C2: Audit trails prove accuracy
• Temporal: Reporting periods, fiscal years
• Relational: Regulatory jurisdiction (SEC, state)
• C5: Auditors, regulators enforce
• C6: GAAP/IFRS accounting standards

1. Materiality

Financial information MUST be accurate for material amounts. Materiality is defined by what would influence a reasonable investor’s decision.

Example: A $50,000 expense misclassification in a company with $10M revenue (0.5%) may not be material. The same error in a company with $500K revenue (10%) is material.

2. Audit Trail

Every financial transaction MUST have a complete, immutable audit trail.

Example: A payment of $25,000 to a vendor must trace to: purchase order, receiving report, invoice, approval, payment authorization, and bank transaction. Any gap breaks the trail.

3. Period Integrity

Financial data MUST respect accounting period boundaries. Transactions MUST be recorded in the correct period.

Example: Revenue recognized on December 31 must reflect goods delivered or services rendered by that date. Recognizing January delivery as December revenue is a period violation.

4. Segregation of Duties

Critical financial functions MUST be separated across different individuals.

Example: The person who approves vendor payments MUST NOT be the same person who creates vendors in the system or reconciles bank statements.

5. Reconciliation

Account balances MUST reconcile to supporting detail and external sources.

Example: The cash balance per general ledger MUST reconcile to bank statements. Differences MUST be identified, documented, and resolved monthly.

`` DECLARE(SOX) = PCAOB_STANDARDS × CANONIC

Where: PCAOB provides Structure: - Control framework (COSO) - Documentation requirements - Testing procedures - Reporting format

CANONIC provides Governance: - C1: Control assertions - C2: Test results, evidence - Temporal: Testing periods, reporting dates - Relational: Entity scope, jurisdictions - C5: Auditor attestation

Result: SOX = ENTERPRISE (#63)

Control Lifecycle: Design — Control documented Implement — Control operating Test — Evidence of operation Certify — Management assertion Attest — Auditor opinion ``

`` DECLARE(Close) = GAAP × CANONIC

Where: GAAP provides Structure: - Chart of accounts - Journal entry format - Financial statement presentation - Disclosure requirements

CANONIC provides Governance: - C1: Account balances as claims - C2: Supporting schedules - Temporal: Period end dates - Relational: Legal entity structure - C6: GAAP presentation

Result: Close = SPECIFICATION (#58)

Close Lifecycle: Cutoff — Period boundary Record — Transactions posted Reconcile — Balances verified Adjust — Corrections made Report — Statements issued Audit — External attestation ``

To create a CANONIC financial vertical:

Identify accounting framework (GAAP, IFRS) Create scope with CANON.md inheriting /FINANCE/ Define financial claims (policies, assertions) Document evidence (reconciliations, support) Establish temporal controls (period close, cutoff) Define entity structure (legal entities, consolidation) Implement controls (SOX, segregation) Map to standards (GAAP presentation)

Result: Owned financial vertical with audit-ready governance.

FINANCE × REAL_ESTATE = Mortgage governance, TRID compliance (RESPA + GAAP) FINANCE × MEDICINE = Healthcare billing, revenue cycle (CPT/HCPCS + GAAP) FINANCE × DEFENSE = Defense contracting, DCAA audit (FAR/DFARS + GAAP) FINANCE × ENERGY = Energy trading, market settlement (FERC + SOX) FINANCE × MANUFACTURING = Cost accounting, inventory valuation (ISA-95 + GAAP) FINANCE × EDUCATION = Student financial aid, Title IV (FISAP + GAAP) FINANCE × LOGISTICS = Trade finance, letters of credit (UCP 600 + Basel) FINANCE × GENOMICS = Genetic testing market, DTC regulation (FDA + SEC) FINANCE × AGRICULTURE = Crop insurance, commodity futures (CFTC + GAAP) FINANCE × QUALITY = Internal controls, SOC reporting (COSO + GAAS)

10 cross-domain compositions. Each strengthens PROV-001 and PROV-002 patent claims.

FinChat demonstrates MAGIC 255 governance applied to financial information. Every answer sourced. Non-advisory by design. Same INTEL + CHAT + COIN composition as the clinical AI suite.

Gap: No existing system provides governance-gated financial compliance with O(1) bitwise checking across SOX, GAAP, audit standards, and cross-domain composition.