Impact of Blockchain Technology on Accounting and Finance

This article discusses the impact of blockchain technology on accounting and finance. It explains how blockchain can change the way transactions are carried out and how it can affect the roles of auditors and financial institutions. It also highlights the opportunities and challenges that this technology presents for accountants.

technology advancment
Accounting in context (Macquarie)
[DATE]
[Company name]
[Company address]

Technological advancements are changing the ways business are operated. The new
industry revolution, often referred to as ‘Industry 4.0’ consist of some very promising
technologies such as Blockchain, machine learning, data analytics, digitalization, Artificial
intelligence (AI), Virtual reality (VR), Internet of things (IoT), cloud computing, etc. I
believe the greatest impact on the business would be brought by the blockchain technology as
it redefines the manner in which transactions are carried out and transactions plays the same
role in the business as played by blood in our body. Blockchain basically decentralize the
process of record keeping leading to a way more security, traceability and automation in this
space. Veterans in the technological space are considering it a revolution as big as once was
the genesis of the internet.
While researching about this technology, I discovered that it can find applications in a wide
variety of fields ranging from accounting and finance to supply chain and operations. Some
applications in these spaces includes smart contracts, automated purchase cycles, distribution
of wages, etc. In the accounting regime, not all the technologies impact in the mode, it has
potential as it is concerned with the transaction being recorded in the shared decentralized
ledgers rather than privately managed individual centralized ledges.
I fear that, as a community of contemporary accountants, we are not sufficiently prepared for
the changes. As Blockchain technology is concerned with enabling complete and conclusive
verification of transactions without a third party, some of the now seeming significant roles
such as auditors, intermediator financial institutes may lose their existence if not all.
Contemporary financial accounting is based on the double book keeping entry system.
However, to gain the trust of outsider or certification that the transactions are fair and as
accordance with the local regulatory rules, independent public auditors verify the company’s
financial information. However, using Blockchain, companies can record transaction directly
in the joint ledgers, creating an interlock system in accounting. It is alike to the transaction
being verified by a notary – except in an electronic way.
For my career and similar functions, this advancement can severely impact the trajectory. It
can simply eliminate the need of vast number of professional only skilled to the jobs which
will be either automated or not required when using blockchain. In order to keep up the pace
with these development, we need to embrace the new technology and develop skills central to
the blockchain and other similar promising innovations.

Every change also brings immense opportunities with it. We are seen as the experts in
developing standards, application of complex system and business logics and hence have the
opportunity to guide and shape the future of blockchain as to how we embed this technology
in the core of accounting and develop blockchain-led solutions and products in the
accounting ecosystem. We need to upgrade the spectrum of skills to assume a position in
which we can advise to organisations considering joining this network of blockchain and
weigh the cost and advantages of the new system.