Blockchain Technology & Accounting Industry

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