Accounting Professional Receive Direction on Blockchain
Blockchain technology is a collection of public ledgers that are cryptographically secured. Interestingly, ledgers are an accounting specialty since the birth of the industry. Therefore, the integration of blockchain in accounting is a very natural step for the industry.
In a recent conversation with Forbes Magazine, Marc Rubin, President of American Accounting Association exudes confidence regarding blockchain. Rubin is also Dean of Farmer School of Business, Miami University in Oxford, OH. According to the academician, there is a significant shift in the way professors are delivering an accounting curriculum. According to Rubin, the profession is adapting to the new technologies that are disrupting the fabric of the industry. In this case, the industry is finding the best ways to integrate blockchain into its best practices.
In essence, accountants are responsible for delivering financial data that influences organisational decision making. Therefore, it is very critical that the information is as accurate and truthful. Here is where blockchain makes the grand entry into the picture. Blockchain technology is basically a record keeping solution that underlies virtual currencies like Bitcoin. Cryptographically secured, it is virtually impossible to alter the data stored a digital ledger. Further, it facilitates a peer-to-peer interaction. As result, there is no need for a central third party in transactions over blockchain platform.
The Big Four
With such qualities, blockchain is both a threat and a blessing to the accounting industry. However, most of the industry players are focusing on the brighter side of blockchain. As the CryptoCoin reporter reveals, the industry’s Big Four are already at the forefront of exploiting blockchain. Basically, the Big Four refers to the four largest firms in the accounting industry. They include KPMG, Deloitte, Pricewaterhouse Coopers (PwC) and Ernst & Young (EY). In particular, the CryptoCoin reporter details that the Big Four are taking on huge bets regarding blockchain.
“EY, PwC, Deloitte, and KPMG have jumped on the blockchain and crypto bandwagon in the form of a crypto audit process. Each of the four has their set of tools and skills which will help in improving cryptocurrency transactions between businesses. They have also made significant investments into the hiring of specialized staff and in-house technologies,” the CryptoCoin reporter reads in part.
Disquiet Regarding Blockchain in Accounting
Interestingly, the integration of blockchain in accounting seems to be eliciting some kind of disquiet in the industry. As earlier mentioned, the technology promises to provide a public record of immutable data. Simply put, there will be no need for auditing of such accounting data. In essence, blockchain provides a trusted record of accounting information. The result of the trusted information could be the partial obsolescence of the auditing sector. This is just one of the extreme impacts of blockchain. It means that auditing firms will have to innovate or risk going out of business.
According to CPA Practice Advisor, dealing with blockchain innovatively requires “transformative “de-skilling” and “re-skilling” of the traditional accountant, CFO and auditor roles.”
Further, the resource advises that: “Accountants need to evaluate the impact of Blockchain on their own internal processes and more importantly, how their clients and prospects are adapting/will adapt to the Blockchain opportunities in their industries/professions.”