A formal specification of automated auditing of trustworthy trade procedures for open electronic commerce

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 counterparty 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. Uniqueness of electronic messages is much harder to achieve. Another problem is that in some countries an electronic contract does not have the same legal status as its paper version. Electronic commerce can only be proven beyond reasonable doubt. We present the formal specification of the audit daemons method that was developed for checking automatically the trustworthiness of electronic procedures, and applied to inter-organized 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 more abstract specification of the auditing method, which gives more structured semantics for the key concepts of the auditing method and can also be used to verify the INTERPROCS implementation of the auditing method. Our formal specification is based on a combination of deontic, dynamic and illocutionary modal logics.