The predictions of the impact of Blockchain in the field of accounting and auditing are disrupting. Such changes may create opportunities as well as challenges for the professionals in accounting and auditing industry. These professionals must treat the blockchain technology as transformative computing architecture capable of changing the entire accounting world. Accounting and auditing professionals must embrace automation because it’s good for efficiency and efficiency is good for business. What are the suggestions to face such challenges.
Companies must adopt electronic accounting systems in order to conform to the Balokchin
Accounting and auditing are serious stuff. Although some people argue that blockchain potential use cases are "real time" accounting and "automated" auditing, the crude reality is that first we may see other developments that are neccesary conditions for these two things to happen. In terms of accounting, you need a "unit of account". Due to the intrinsic (and natural) characteristics of blockchain (or DLT) protocols, it seems "trivial" that an accounting protocol includes the "unit of account" as a token. But this is only possible if this "unit of account" is the official unit of account of a country or currency area. In that sense, my view is that for accounting purposes, even if the technology is mature enough to offer accounting solutions (See aragon.one, as an example) there is much to do on the regulatory side. If I have to bet, a proper accounting system as a blockchain protocol needs a central bank backed (or state backed) cryptocurrency as the "gas". Maybe for some people this development may seem unfeasible, but there is ongoing official research from different central banks on the pros and cons of issuing crypto currencies (crypto eur, crypto usd, ...).
Obviously, thinking in terms of traceability and time stamping, every blockchain protocol is an accounting system "by definition", but, again, for practical reasons, the link with the official unit of account is neccesary.
Regarding the audit activity, is more a question of the relationship between onchain and offchain assets, commodities, rights, money, and so on. Imagine that everything could be "tokenized", I mean, directly replicated as a "digital asset or liability" into a blockchain. Then, accounting could be checked "real time" and in an "atomic" or analytic approach (every new entry could be checked by authorized third parties, probably automated agents). Then, the role of the auditor will move to the double check the precise relationship beetwen onchain and offchain assets and liabilities. Does this token represent that particular asset?, or that payment?. In that sense, the role would be closer to an "independet certifier" . But this activity may offer advantages if provided by government agencies, because it could be easily modelled as a natural monopoly.
Please note that I am only speculating about potential future outcomes. As I said, there is still a lot of room for "traditional" audit activity, and the barriers are more on "change management" than on technological issues.
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Carlos
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