Blockchain implementation on accounting is going to have a symbiotic relationship. Blockchain is one of the fastest rising technologies and as a kind of indestructible ledger, the blockchain offers a new way to save and share data. This may lower the demand for accountants to save data in disparate locations without any need to consolidate and validate it. In this article we’ll discusses the potential of the blockchain technology for the global accountancy industry and the ways it can be implemented in this arena.
The blockchain is commonly known to us as the technology supporting bitcoin and other cryptocurrencies, it, in fact, underpins them by reconciling the accounts. Technology offers a more durable and transparent framework for the accounting firms to measure and track their assets and can make it easier for them to understand which assets are available in the real-time, their value etc.
Blockchain Implementation on the role of the Accountants
Blockchain is unlikely to replace the accountants, as the first things that people worry about is if an advancing technology will be able to replace people. The blockchain may be able to hugely impact accounting in almost every aspect, ranging from auditing to cybersecurity and everything in between and to the way information is stored, accessed and interpreted.
Blockchain brings with it an enormous opportunity. The accountants and the accountancy firms that embrace the technology would be the ones highly benefitting in the years to follow. Accountants are experts in terms of record-keeping and the blockchain can effectively help records to be reserved on an interoperable system that the auditors can access safely.
Blockchain Implementation in Accounting & the Role of the Auditors
Performing audit of the company’s financial position wouldn’t be as important if all the transactions requiring assessment are visible on the blockchains and this may have an impact on the way the auditors work allowing the auditors to answer higher level questions.
Automated audit processes
In the years to follow, the finance teams are believed to use distributed ledgers and artificial intelligence for automating multiple processes. As the data is saved in the distributed ledgers, verified by the authorised parties and updated on a continuous basis, it creates a possibility of real time reporting for the team, to the auditors and the management.
Authentication of transactions
Blockchain may support an online peer-to-peer network that uses computer-powered cryptography to help exchange of value. The computers linked to the network, called nodes, verify and save the transactions simultaneously, letting parties who don’t know each other to execute transactions without the need of any trusted third-party intermediary.
Tracking ownership of assets
One of the basic features of the blockchain is that if something once put on the blockchain, it cannot be altered and a use case that has risen to pop up for the blockchain technology is the ownership verification tool. Once the asset gets listed over the blockchain, the ownership of it becomes unchangeable unless any change is verified by the asset’s owner.
Capturing the information about the assets including raw materials and intellectual property on the blockchain chain gives accountants and their company’s supply chain partners as well as external auditors a source of truth about the core asset information.
The blockchain technology also leads to more transactional-level accounting. Experienced accountants will work on examining the real economic interpretation of the blockchain records and match them to economic valuation and reality.
Managing identities using a blockchain ledger makes it very hard for deceivers to intervene the system without leaving an evident digital trial. A blockchain’s immovable record empowers the accountants to take control of their data, tied to their identity and make sure its accuracy with time. With blockchain decentralised identifiers, users can regain full control over their record.