Blockchain Technology

Running Head: IT 0
INFORMATION
MANAGEMENT SYSTEMS

IT 1
Blockchain Technology
The Blockchain is an definitely ingenious development with creating backbone of a new type
of internet. A blockchain in simple terms known to be as a time-stamped series of immutable
data record that is administered by group of CPUs not retained by any single entity (Crosby et
al, 2016). Each of these data blocks is safeguarded and bound to one another via
cryptographic codes (i.e. chain). There is not any central authority to blockchain network and
as it is a pooled and absolute ledger, the info in it is exposed for everyone and anyone to see.
Therefore, whatever that is developed on the blockchain is translucent and each individual is
responsible for their activities.
With regards to this, there is no transaction cost and it is highly secure for sharing
information from one point to another in an entirely automatic way. The model is also used
by Bitcoin for financial transactions however, it can be installed in various other means. In
financial world, the applications are more evident and the innovatory changes are more
impending. Blockchain technology will change the way such as eliminating bank accounts
and practically all services provided by banks. Blockchain technology also includes its three
pillars including decentralization, immutability and transparency (Iansiti and Lakhani, 2017).
In decentralization, the information is not get placed on single entity as each one in the
network owns the information. The next pillar transparency forces the organisation to be
honest about the transactions they undertake with the help of digital signature as anybody can
simply check the type of transaction they make. Immutability in blockchain ensures that there
is no tampering being made with the information or data that is once entered into the
blockchain (Rabah, 2017). Therefore, a small change is put in the input, the modifications
imitated in the hash will be vast.
Ever since the technology has come into reality, various researches have been started for the
usefulness of this technology in various sectors. This technology serves as reliable platform
and there are several new things using the blockchain technology like smart contracts (Levy,
2017). However, this technology is highly complex and technical for any normal individual
to understand. Blockchain benefits cannot be fully reaped in absence of larger network of
users and widely scattered nodes.
This booming technology also provides a mechanism providing the highest degree of
accountability for everyone. This ensures no missed transactions neither by machine or

IT 2
human error. With the help of this technology, one can also evade the probability of
exchanges done without the agreement of any parties involved. One can also call blockchain
an accounting technology as it ensures ownership transfer of assets and retaining a ledger of
true financial data. It is also widely concerned with communication and measurement of
financial information. Considering accountants, this technology helps in offering simplicity
over possession of properties and presence of responsibilities and therefore, improves
effectiveness (Dai and Vasarhelyi, 2017).
This technology also has the potential to enhance the accounting profession by decreasing the
maintenance cost and reconciling ledgers and providing absolute inevitability over the history
and possession of assets. Blockchain technology can also support accountants to achieve
clarity in relation to available resource and responsibilities of their firms and also make the
resources free to embrace on valuation and planning irrespective of recordkeeping (Kokina,
Mancha and Pachamanova, 2017). It is not required for accountants to be engineers with
depth information of how blockchain operates. However, they are required to learn how to
advise on adoption of blockchain while considering the influence of blockchain on their firm
and clients. They also need to act as bridge, undertaking significant conversation involving
stakeholders of business and various technologists.
For accountants, they are deeply understood ledgers from a long period of time and also using
technologies for decades. Hence, Blockchain cannot be considered a challenge or threat to the
profession but it is an impressive new opportunity that must undertake by accountants as the
– impact of this technology is far too significant for any accountant to overlook. Accountants
are required to measure the Blockchain impact on their own internal processes and more
significantly, how their prospects and clients are adapting to the various opportunities of
blockchain technology in their specific sector and profession (Watson and Mishler, 2017).
With regards to this, accountants can also work as advisors to organisations considering
connecting blockchain themselves, offering advice on weighing the costs and benefits of the
new system. Accountant’s mix of business will point them as main advisors to organisations
approaching these new technologies seeking for opportunity.
One of the key aspect of blockchain that accountants should be motivated about is its ability
to reduce audit time. Considering small agreements, various functions of auditing can be
automated which will decrease the time, an auditor required to look after the records. In
addition, the integral traceability developed into blockchain builds auditing easy and fast.