Hi Valbona, I am currently working in different blockchain projects, and I do think that real-time tracking of activities could be a desirable outcome in the future (not able to foresee how far or close, hehehe).

Today the techonolgy is still inmature for this particular purpose, although there are interesting proposals on decentralized accounting.

For instace, you can look at "Aragon", a blockchain project that want to do this (amog other trhings) for decentralised organizations (but still not today for ordinary companies).

Otonomous is another iniciative maybe a little less ambitious but promising (not accounting but shareholders management for private companies).

In my view, still to early, but anyway, an external auditor may see its function changed in the close future. Even if you do not use blockchain, machine learbning capabilities may reduce the need for external auditing, reducing the number of external auditors and making more efficient audits.

Obviously if blockchain or DLTs are able to cope with real time accounting, welll... then you only need a goup of key "super auditors" reviewing control panels and alerts working for the SEC or other supervisors (the Fed for banks???)... Today this is still (at best) in a proof of concept (POC) state.

I agree with Carlos - the fact that more information will be embedded and protected means a move from social contracts to more explicit understandings expectations, policy, and processes. Someone will still have to connect that data with action. The addition of more explicit documentation could, in fact, make the auditor more important. Add in activity-based costing across the supply chain and the role of the auditor becomes even more complex. It is a very interesting question Valbona. Certainly, the auditor's job will change! 

Blockchain technology will make the life of the auditor much easier. However, I don't believe it's going to eliminate the functions of the external auditor in the near future.

Thank you very much for your thoughts Carlos, Robert, and Nafis.

My main assumption on asking that question was that SEC would have direct access on the shared ledger... Per blockchain technology the record is accepted/registered in the shared ledger if in compliance with the predetermined protocol and no one can change it afterwards. Then, both the government (because of direct access) and the public will be confident enough in firm's financial information and maybe won't need other intermediaries for compliance assurance. Also, there could be instant reports and maybe the annual 10-K report, the one that external auditors audit and certify, won't even exist. The annual reports I think mainly exist because normally it takes a lot of time to record-keeping and preparing financial statements...It won't be the case when using blockchain tech. (Even the role of the banks as financial intermediaries will change dramatically...)

Anyway, I consider my self pretty unfamiliar with the idea yet, just wondering...

Thank you!

Dear all,

I am actually having a question for all of you. Are you all assuming public blockchain ? Yes it is true that everybody who operates in the blockchain no matter if it is public or private can have real time information so that is great for auditors or investors. And in public blockchain everybody can be active, for sure an easy way for government to audit firms.

What if a group of companies works on a private blockchain then it is not automatically that government has access to that blockchain or even knows about that specific blockchain. What if a company for 60% operates in a public blockchain and the other 40% in many different private blockchains with different identities . Now auditing becomes a really interesting cyber detective job.

Hi Valbona.............................First of all,I want to thank you for sharing this wonderful concept with all of us..................................Please note that Blockchain in Accounting/Audit has the power to minimise(if not eliminate)the errors,and of course frauds. It will definitely ensure the integrity of financial records.It may question the need for having external auditor.In my opinion,it may revolutionise the entire accounting spectrum.It might constitute another major development,after the introduction of IT in Accounting