Blockchain
technology has the potential to upend entire industries. Especially the
financial sector may undergo disruptive change. Although this technology caught
the attention of many of the largest financial institutions, use cases still
remain in the experimental phase.
Blockchain
is one of the most welcomed technologies of this new era. Digital scientists
are categorising it as a medium to high impact creating technology. Blockchain
was first introduced as the core technology behind Bitcoin, the
headline-grabbing decentralized digital currency ecosystem proposed in 2008. A
blockchain is a continuously growing distributed database that protects against
tampering and revision of data and has the potential to shapeshift the nature
of today’s accounting. At its core, blockchain is an open, decentralized ledger
that records transactions between two parties in a permanent approach without
requiring third-party authentication. This creates an extremely efficient
process and would reduce the cost of transactions.
A
blockchain solution, when combined with appropriate data analytics, could help
with the transactional level assertions involved in an audit, and the auditor’s
skills would be better spent considering higher-level questions. The move to a
financial system with a significant blockchain element offers many
opportunities for the accountancy profession. Accountants are seen as experts
in record keeping, application of complex rules, business logic and standards
setting. They have the opportunity to guide and influence how blockchain is
embedded and used in future, and to develop blockchain-led solutions and
services. Blockchain could enhance the accounting profession by reducing the
costs of maintaining and reconciling ledgers, and providing absolute certainty
over the ownership and history of assets. Blockchain could help accountants
gain clarity over the available resources and obligations of their
organisations, and also free up resources to concentrate on planning and
valuation, rather than record keeping.
The
spread of internet complemented with the rising speed of browsing over the last
few years has led to exponential advancement of the digital world. Blockchain
is set to be the next step on this evolution. Extensive research is being
conducted worldwide in order to explore the prospects in revolution of
technologies related to accounts and audit. It has even reached to the level of
building a premise that Blockchain technology can bring tremendous improvement
in terms of efficiency and reduction in consumption of time for the performance
of services related to its concerned areas.
Source: The Management Accountant Journal, Deloitte
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