Living with Blockchain
Most governments, services firms and accounting bodies around the world have invested their time to explore the opportunities offered by blockchain technology. Blockchain is an accounting technology and is concerned with the transfer of ownership of assets and the maintenance of a ledger of accurate financial information.
For accountants, using blockchain provides clarity over the ownership of assets and the existence of obligations, and can dramatically improve efficiency and reduce costs. Alongside other automation trends such as machine learning, blockchain will lead to more transactional-level accounting – but not by accountants. Instead, successful accountants will be those who assess the real economic interpretation of blockchain records, marrying the record to economic reality and valuation.
Blockchain is a replacement for bookkeeping and reconciliation work, and this could threaten the work of accountants in those areas while adding strength to those focused on providing value elsewhere. For example, in due diligence processes in mergers and acquisitions, distributed consensus over key figures allows more time to be spent on judgmental areas and advice and promises an overall faster process.
The spectrum of skills represented in accounting will change because of the move to a financial system with significant blockchain elements. This will offer many opportunities for the accountancy profession. Accountants are seen as experts in record keeping, application of complex rules, business logic and standards setting. Accountants can also work as advisers to companies considering joining blockchains themselves, providing advice on weighing the costs and advantages of the new system.
Blockchain also has applications in external audit. Performing confirmations of a company’s financial status will be less necessary if some or all of the transactions that underlie that status are visible on blockchains. Blockchain will result in a profound change in the way audits work.
Accountants need not be engineers with detailed knowledge of how blockchain works. However, they will need to know how to advise on blockchain adoption and consider the impact of blockchain on their businesses and clients.
Vimal receives the Catalyst CIO Award
Our Director of IT, Mr Vimal Rama Chandran, CISA, BCM LA, COBIT 5 CA was presented with ‘The Catalyst CIO Award’ at the Future IT Summit & Catalyst Award 2022
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