Is Blockchain boon or a bane for the Accountants?
Blockchain technology is already disrupting a few industries, and it is here to stay. Though in its infancy, its applications will only continue to increase.
But will it make accountants irrelevant? No, but it will change the way in which accountants do their work – much like computers have continued to change the ways in which everyone does work.
- Thanks to blockchain, recording and timestamping of documents will render all accountancy events permanently memorialized and immutable
- Smart contracts can result in such things as invoices being paid automatically once receipt of goods has been verified
Because blockchain provides an immutable and transparent record of all accountancy-based data, it offers an opportunity for accountants and CPA firms to streamline their processes and audits, while ensuring that the records are accurate and truthful. This is an amazing improvement over traditional accountancy procedures that can be fraught with errors and fraud.
For these reasons and more, the big accountancy firms are investing in a full exploration of the applications of blockchain.
Blockchain has the potential to further enhance the accounting industry by reducing the costs of maintaining and reconciling ledgers, and providing absolute certainty over the ownership and history of assets.
While using blockchain, instead of keeping separate records based on transaction receipts, companies can write their transactions directly into a joint register, creating an interlocking system of enduring accounting records. As all entries are distributed and cryptographically sealed, chances of destroying or manipulating them to conceal activity is practically impossible. This is exactly similar as the transaction being verified by a notary — only in an electronic way. This will allow auditors to verify a large number of data in a short period of time. The cost and time necessary to conduct an audit would decline considerably.
Blockchain as a source of trust can also be extremely helpful in today’s accounting industry. It can be gradually integrated with typical accounting procedures: starting from securing the integrity of records, to completely traceable audit trails. This will lead to a future where the fully automated audits will become a reality.