Does the blockchain mean the end of accounting?
Like computer aided design software meant the end of Draughtsmen, many are asking if the advent of the of blockchain technology means the end of the accounting profession. The fear is that in a world ruled by irrefutable digital ledgers there may no longer be a need for those whose profession is built on confirming financial data. The answer may be that the blockchain may not eliminate the accounting profession but it is certainly going to change how things are done and the sort of skills that accountants will need to remain relevant.
In many ways the blockchain can be considered an evolution of accounting, much as double entry accounting changed the way that people managed financial data and opened up much more information and insight into the internal financial processes of a business. The blockchain promises to be just as revolutionary and to open up levels of complexity to analysis that was never considered practical or possible. Just as double entry accounting allowed people to see deeper into the financial process and see the interplay between both sides of the leger within a company, The blockchain, which in its essence is simply a distributed ledger in which all the transactions are linked together in a permanent record, will allow the interplay to be seen across companies and across countries.
Since the data on the blockchain is unchallengeable and absolute it will mean a great deal of time and money will be saved in auditing those transactions. Through the use of artificial intelligence and the blockchain future auditors will be able to crunch through huge volumes of data and since the transactions themselves are already confirmed by the blockchain they will concentrate their auditing resources on detecting fraud and internal and external collusion. It will certainly change how the auditing profession works and the skills that will be required, it is easy to think that in a business world where ethereum contracts underpin the transactions that you will not be able to sign off on the books if you can’t actually read the code of those contracts.
Blockchain will also open up incredible opportunities for those Accountants that are comfortable with the emergent technology as there is growing demand from business to implement the blockchain into their internal financial processes. The ways in which the blockchain can help businesses reduce costs are almost endless. From simplifying the procurement process to providing vast amounts of linked financial data for analysts to devise more efficient business model, the opportunities to sell high value added services as part of the blockchain implementation process are unprecedented.
Even the most mundane areas will be affected as we see the blockchain is affecting all areas from how small businesses prove their worthiness for a working capital loan to how accounting software is designed. The effects will be wide and far reaching but for those ready to embrace the challenge there is also great opportunity. There has probably never been a better time to be an Accountant.
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Director of Accounting for Private Educational Institutions at Jefferson+Partners (Sydney) from 2007-2015. Founded and led Lebrau & Partners Pty. Ltd. from 2015 until now - a boutique accounting firm serving educational institutions across the Asia Pacific (both public and private, primary, secondary and tertiary institutions).