Blockchain: wise use in the accounting

The blockchain is a universal technology or a tool that can become a wonderful basis for developing further highly efficient technologies. Now, the most well-known ultimate outcome of using blockchain technology is a cryptocurrency of course and its most famous representative Bitcoin. The cryptocurrency blockchain system proved it has such a great reputation not for nothing. There has not been a case on hacking it. But virtual money is just one of many ways of the potential use of the technology.

Thanks to such infallibility blockchain certainly have a great future in many human fields that have the same great concern about security issues, they are money turnover, storage of information, transparent elections and so on. Some people say blockchain is another stage of the technological development that will certainly steal jobs from a great number of people. We believe the blockchain tech can greatly assist people in the process of implementing their job commitments. The accounting profession is far from being an exception.

The blockchain is made as a ledger and it makes a great advantage for accountants.

What does the Blockchain Tech have to suggest to accountants?

First, we are listing the blockchain technology features that will certainly play right for accounting:

• Either party may have confidence in the information placed in the blockchain even if he or she doesn’t trust its counterpart;
• The transaction can be completed only if it is approved by both parties;
• Thereafter, the information cannot be changed.

International accounting corporations have been thoroughly studying the opportunities of the blockchain application while accounting and auditing. We can easily understand them. Who will need a mediator who expresses his or her opinion on the reliability of the audit if the audit is a priori reliable? Nevertheless, most experts agree that the accent in the auditors’ work will shift from confirmation of the events to the confirmation of their classification in accounting. Accountancy will form the accounting policies and will follow the classification and the interpretation of the events.

Great Expectations

• The blockchain tech will simplify international deals in frames of small businesses, as it is going to be much easier to conduct financial transactions of foreign clients;
• The blockchain tech will simplify the procurement processes, as it lets securely register the transactions, provides unprecedented transparency and increases operational efficiency;
• Companies don’t need to check all the accounting documents that is quite an expensive audit service. It is a wonderful way to save outside investors’ time and money;
• Accounting records are secured with the help of cryptographic keys; that makes falsification and destruction of records almost impossible. As a result, there is no opportunity to conduct fraudulent transactions;
• Automation of most of the processes that now are being conducted by accountants, for example, tax calculations.

Companies will implement the blockchain system to increase transparency of their activity and to facilitate the access for auditors. Such changes are advantageous for most stakeholders but they can be negatively perceived by those working in the shadow economy or conceal their proceeds. Still, pioneers who will be the first to adopt the innovative direction will gain additional advantages and will be able to take leading positions in the future.

Bright Present

Some specialized companies have already started working with the cryptocurrency assets. Many countries have started developing a legislative framework to regulate taxation applied in regard to the revenue received as a result of conducting transactions with virtual money.

Large audit firms take part in developing new regulations, pursuing vigorous campaigns for shaping the rules not only with regard to the cryptocurrency but to the overall technology. It is a really smart move as it maximizes their chances of success.

The main advantage of the distributed ledger is the improved transparency of information and fight against fraud that is really good news for all the parties. Instead of examining paper documentation and determining if a tax declaration contains the true figures, auditors can check the data using the blockchain records.

Today, The Bank of New-York Mellon tracks banking transactions with the help of the blockchain technology recording any movement of financial resources. The state of Delaware together with Symbiont applies the blockchain tech to register securities and to communicate with the shareholders.