Blockchain- The Future of Accounting
After the blockchain technology, ‘disruption’ is the new normal. We need to embrace the disruption by learning this technology, adopting and implementing in a most efficient way. Blockchain technology is not limited to cryptocurrency, cryptocurrency to blockchain is like Gmail to internet. Blockchain is much wider and it has a great scope of implementation across industries. In this article, I will be talking about future of accountancy after implementation of blockchain technology.
Blockchain has so much potential for accounting industry as fundamental of blockchain technology is to some extent similar to the accounting principles. In accounting, reconciliation plays an important role similarly, one of the features of this technology is the reconciliation of transactions between the secured parties e.g. in case cryptocurrencies and bitcoin.
Trust is a key point in accounting and auditing. There are two parties involved, one is the person who maintain the accounts and other is who audits such account. While the person who creates and maintain accounts, can trust its own work. However, when it comes to auditing the person has to rely upon the external person, there could be possibility of error while sharing data to auditors. Further, it involves significant time and cost of both the person and the auditor. Blockchain technology could be a game changer in accounting and auditing wherein instead of sharing each data separately, a joint register is created wherein all the data is stored after verification on a real time basis and there will not be any possibility of destroying or falsifying any record. Hash functionally plays a vital role in verifying and maintaining the integrity of the data.
The access of this database is available to the auditors also in a very secured way. The key benefit of this technology is that the auditor will have access to the verified data on a real time basis and this will reduce significant time and efforts. It would be a great development from a corporate governance perspective as well wherein the integrity of transaction , accounting and audit will protect the interest of shareholders at a large.
Definitely, blockchain will change the way accountants and auditor works. With accountancy, blockchain is set to hugely impact everything from auditing and cybersecurity to the way that we store, access and interpret information. The accountants and accountancy companies which embrace blockchain and related technologies will be in high demand in future. The impact of blockchain technology can be considered as similar to the launch of personal computer which had changed the way we work. blockchain will certainly result into more productivity more efficiency and greater results.
Blockchain is coming to disrupt each industry. Data will be more secure more transparent. In healthcare, for example, blockchain-based patient records could pave the way to a fairer system in which different providers all have access to patient data. The patient could have access to it, too. For accountancy, blockchain-based records systems will increase transparency and making it easier for people who are responsible for accounting. They will also make it easier for auditors to step in and to make sure that everything’s in order.