Blockchain’s Impact on the Future of Accounting

The new kid on the ‘block’ in terms of accountancy practices is something called ‘blockchain’.

In simple terms, blockchain is a collection of immutable records that are not subject to a central authority. The records are owned by a cluster and no single entity can make changes that are not seen by all others. Each block of data is secured and bound to the chain using cryptographic principles.

This means that blockchain provides a level of transparency which is useful in the accounting world. It enables the creation of ledgers of financial information that are accurate and clear. There are several benefits to be had from using blockchain technology in accounting processes.

Accounting Enhancements that blockchain can bring

Blockchain has the potential to impact accounting practices in several ways.

• Reducing the cost of maintaining and reconciling ledgers.
• Ensuring that ownership of assets is clearly defined.
• Providing clarity regarding the resources available to an accounting organisation and improving the utilisation of those resources.
• Together with other advances in technology, enabling accounting professionals to concentrate on interpreting information and providing advice rather than processes like bookkeeping.
• Enabling more difficult accounting areas, such as defining the value of data, to be embraced. This can happen due to improved certainty regarding transaction history.
• Changing and broadening responsibilities for accounting professionals. While technology like blockchain can remove the need for work such as bookkeeping and reconciliation, it allows more emphasis to be placed on other areas of accounting. This includes areas such as due diligence.

Implications for auditing processes

When it comes to the benefits of adopting processes that utilise blockchain technology, they apply just as much to external auditing as they do to other areas of accounting. In fact, making use of blockchains could revolutionise the auditing world. This is because there should be less need for the performing of auditing checks if all parts of the blockchain are fully visible. All of the data should be completely transparent.

Of course, auditors make decisions that are not simply to do with basic data. They need to spend time considering questions at a higher level. If having blockchain technology in place takes away the need for some of the more basic investigations this means they have more time for investigating and questioning in depth. This has the potential to add an extra layer of quality to accounting processes.

In summary

By its nature, blockchain helps to provide accounting systems that are both efficient and transparent. When used in conjunction with other technology, these systems can help remove the need for some work such as bookkeeping and reconciliation. This enables accounting professionals to spend more time analysing data and providing advice that is beneficial to the business.

Blockchain also had the potential to bring big changes to the world of auditing. Given that accounting processes should be more transparent, auditors can use their time to complete more in-depth and higher-level investigations. It remains to be seen how widely blockchain technology will be adopted for accounting processes but it certainly has plenty of potential.

If you are an accountancy professional looking to secure your next role, register with us.

Blockchain’s Impact on the Future of Accounting

The new kid on the ‘block’ in terms of accountancy practices is something called ‘blockchain’.

In simple terms, blockchain is a collection of immutable records that are not subject to a central authority. The records are owned by a cluster and no single entity can make changes that are not seen by all others. Each block of data is secured and bound to the chain using cryptographic principles.

This means that blockchain provides a level of transparency which is useful in the accounting world. It enables the creation of ledgers of financial information that are accurate and clear. There are several benefits to be had from using blockchain technology in accounting processes.

Accounting Enhancements that blockchain can bring

Blockchain has the potential to impact accounting practices in several ways.

• Reducing the cost of maintaining and reconciling ledgers.
• Ensuring that ownership of assets is clearly defined.
• Providing clarity regarding the resources available to an accounting organisation and improving the utilisation of those resources.
• Together with other advances in technology, enabling accounting professionals to concentrate on interpreting information and providing advice rather than processes like bookkeeping.
• Enabling more difficult accounting areas, such as defining the value of data, to be embraced. This can happen due to improved certainty regarding transaction history.
• Changing and broadening responsibilities for accounting professionals. While technology like blockchain can remove the need for work such as bookkeeping and reconciliation, it allows more emphasis to be placed on other areas of accounting. This includes areas such as due diligence.

Implications for auditing processes

When it comes to the benefits of adopting processes that utilise blockchain technology, they apply just as much to external auditing as they do to other areas of accounting. In fact, making use of blockchains could revolutionise the auditing world. This is because there should be less need for the performing of auditing checks if all parts of the blockchain are fully visible. All of the data should be completely transparent.

Of course, auditors make decisions that are not simply to do with basic data. They need to spend time considering questions at a higher level. If having blockchain technology in place takes away the need for some of the more basic investigations this means they have more time for investigating and questioning in depth. This has the potential to add an extra layer of quality to accounting processes.

In summary

By its nature, blockchain helps to provide accounting systems that are both efficient and transparent. When used in conjunction with other technology, these systems can help remove the need for some work such as bookkeeping and reconciliation. This enables accounting professionals to spend more time analysing data and providing advice that is beneficial to the business.

Blockchain also had the potential to bring big changes to the world of auditing. Given that accounting processes should be more transparent, auditors can use their time to complete more in-depth and higher-level investigations. It remains to be seen how widely blockchain technology will be adopted for accounting processes but it certainly has plenty of potential.

If you are an accountancy professional looking to secure your next role, register with us.