A Formal Analysis of Auditing Principles for Electronic Trade Procedures

Abstract

One of the major issues involved in establishing new trading relationships is the lack of an a priori trust relationship between the parties. Without a solution of this trust problem it is virtually impossible to establish new trade relationships. This is an old and well-known problem in international trade. One way to create the necessary trust is by using trade procedures that involve exchanges of documents between the trading partners to verify that the counter party has fulfilled his part of the agreement. Up till now these documents were paper documents. In electronic commerce these paper documents are replaced by information exchanges. One crucial question, however, is whether these documents provide the same trustworthiness as the paper documents. For example, uniqueness of ownership documents is simple to guarantee in the case of a signed paper document. However, uniqueness of electronic messages is much harder to achieve. Electronic commerce can only become a success in international trade if the trustworthiness of electronic versions of trade procedures can be proven beyond reasonable doubt. We present the formal specification of the design principles for trustworthy trade procedures, building on the work on audit daemons [17,18] and their application in [3] on inter-organisational trade procedures. It appears that the basic principles of internal auditing within a company can be adapted for this auditing method. This auditing method has already been implemented in INTERPROCS, which is a Prolog-based tool for representation and analysis of procedures. In the formal specification given in this paper we give a more abstract specification of the auditing method, which gives a more structured semantics for the key concepts of the auditing method used in INTERPROCS. Our formal specification is based on a combination of deontic, dynamic and illocutionary modal logics.

It is not (only) about privacy: How multi-party computation redefines control, trust, and risk in data sharing

“…Similarly, having control mechanisms in place is also essential in reducing risks involved in transactions and building trust among third parties (Bons et al, 1998(Bons et al, , 2012. This can be in the form of formal documents outlining obligations, prohibitions, and commitments among parties (Bons et al, 1998(Bons et al, , 2000. At the same time, the trustworthiness of any procedures to control risk is also contingent on the procedures themselves not being vulnerable to risks.…”