Performing confirmations of a company’s financial status would be less necessary if some or all of the transactions that underlie that status are visible on blockchains. Implications of blockchain for auditorsīlockchain has applications in external audit. For example, in due diligence in mergers and acquisitions, distributed consensus over key figures allows more time to be spent on judgemental areas and advice, and an overall faster process.
This could threaten the work of accountants in those areas, while adding strength to those focused on providing value elsewhere. And an asset’s ownership might be verifiable by blockchain records, but its condition, location and true worth will still need to be assured.īy eliminating reconciliations and providing certainty over transaction history, blockchain could also allow for increases in the scope of accounting, bringing more areas into consideration that are presently deemed too difficult or unreliable to measure, such as the value of the data that a company holds.īlockchain is a replacement for bookkeeping and reconciliation work. For example, blockchain might make the existence of a debtor certain, but its recoverable value and economic worth are still debateable. Instead, successful accountants will be those that work on assessing the real economic interpretation of blockchain records, marrying the record to economic reality and valuation.
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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 recordkeeping.Īlongside other automation trends such as machine learning, blockchain will lead to more and more transactional-level accounting being done – but not by accountants. For accountants, using blockchain provides clarity over ownership of assets and existence of obligations, and could dramatically improve efficiency.īlockchain has the potential to enhance the accounting profession by reducing the costs of maintaining and reconciling ledgers, and providing absolute certainty over the ownership and history of assets.
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Much of the profession is concerned with ascertaining or measuring rights and obligations over property, or planning how to best allocate financial resources. The accounting profession is broadly concerned with the measurement and communication of financial information, and the analysis of said information. It is concerned with the transfer of ownership of assets, and maintaining a ledger of accurate financial information.
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Download nowBlockchain is an accounting technology. Tech Faculty's report on Blockchain describes the technology and its likely impact on business, in particular on the accounting profession.
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