Among the many disruptive technological trends that affect the way we do business, blockchain is one that is less well known within the accounting community. However, given its potential impact, blockchain is definitely a trend that accountants can afford to ignore more.
Defined as a large open book, distributed, blockchain technology files and checks transactions without central trust authority. The technology itself exists as a file that keeps a growing list of sorted records called blocks. Each block contains a timestamp and a link to a previous block using a "fingerprint". Blockchains are resistant to data modification and can not be modified retroactively.
Here are some possible uses for blockchain in accounting and auditing:
- Rastos audit traceability;
- Automated auditing processes;
- Transaction authentication;
- Asset tracking;
- Development of "intelligent contracts" and,
- System of registration and inventory of any asset, ranging from raw materials to intellectual property
While many of us associate with digital money blockchain as Bitcoin, its potential impact is much wider. Doctors to identity management to land rights and registers of world trade, blockchain acts like bookkeeping essential - a central point of truth. Instead of businesses maintaining and reconciling records of the same transaction in its separate databases or private management, both parts of the transaction are simultaneously saved in a shared workbook. Because of this capability, and its ability to record transactions in real-time, blockchain is in the process of updating traditional billing methods, documentation, contracts and payment processing for businesses and large and Small industries.
"In the future, virtually all functions of the world of financial services will be displaced, disintermediadas and decentralized," said Ron Quaranta, chairman of the Blockchain Wall Street Alliance at an executive roundtable of the American Institute of Experts -comptables / CPA.com in February. "The Internet has given us a powerful way to share and access information. Blockchain now gives us a powerful way to share and access value. "
Impact on Audit Practices
Like most forms of technology, accounting and auditing blockchain greatly reduces the risk of errors by reconciling complex and disparate information from multiple sources. Moreover, accounting documents are not alterable once committed under the block, even by the owners of the accounting system. Since each transaction is recorded and verified, the integrity of the financial records is ensured. Though impressive, this technology has the potential to dramatically reduce or even eliminate the need for audit resources - potentially disrupting the accounting profession as a whole.
"Our technology has finally reached our desire to conduct transactions without the need to resort to the other party without the need for an intermediary," Quaranta said.
With such an upheaval on the horizon, one would think that the accounting would take note. However, in a recent study conducted jointly by Thomson Reuters and the Chartered Institute of Management Accountants, only 4 percent of respondents chose blockchain as a disruptor that will have a big impact on your business in 25 years. We believe that it can be even more damaging to the profession than machine learning, which will have a significant impact on the profession, and we believe that the impact will begin to be felt in the years to come.
Given the consequences, accounting firms rely heavily on their audit practices can think of growing diversification and services and customer. With Blockchain, it is even necessary to audits in the future? As with all new and potentially disruptive technologies, it is important to understand the opportunities and consequences and how your business will advance while adopting advanced technologies such as the block chain, continues to accelerate.
Interrupt kiss
Although we can not change the fact that technology alters our business, we can choose to adopt and develop new forms of added value to serve our customers. The most successful companies move away from traditional adherence activities and strategic consulting roles focused on helping clients better manage their business, improve their personal financial situation or evaluate change risks.
Therefore, although the accounting and audit control chain still do not feel, it is never too early to look at the technology landscape and adjust your business strategy accordingly. In a really the only technological way, informed and open to change is so quick to succeed.
