When I joined the university for my undergraduate course several years ago, I was excited that I am going to be an accountant thus handle money for big companies and work for the big 4 audit firms - EY, PwC, Deloitte and KPMG.
Little did I know that accounting was also evolving on the wheels of new revolutionary technologies. Anyway, who knew that there would ever be a technology more innovative than the internet? If there are any, perhaps just a bunch of sophisticated programmers, who are actually the ones innovating the new technologies.
Accounting has changed so much over the last decade!!
After graduating, I proceeded to do ACCA and then a certificate in Quickbooks accounting software, because I was deliberately rolling my sleeves to become a top auditor, a job I would work in until retirement. Then one day I got an an email alert of a new blog on ACCA platform introducing members and students to a technology called Blockchain.
https://www.accaglobal.com/my/en/member/member/accounting-business/2017/04/insights/blockchain-17.htmlIn the blog, ACCA was suggesting that in the next few years after blockchain is adopted in accounting, perhaps certain accounting and auditing roles will no-longer be needed.
This scared the hell out of me. I discontinued my ACCA studies and registered for programming classes to learn Python and Blockchain development.
After learning blockchain for sometimes and even taking courses with the University of Nocosia and the Blockchain Council, I wrote and published a book titled
'Understanding the Blockchain'So, a dreamer Accountant cum Auditor now fully entered the Blockchain industry!!
Blockchain in Accountancy
For long I quite didn't see how Blockchain is relevant in Accountancy until I learnt about Triple-entry Accounting. It's humorous that triple-entry accounting actually started in the 1980's. Recently the accounting concept came to the limelight when Ian Grigg associated it with Blockchain technology.
Triple-entry accounting is an accounting strategy that is an enhancement to the traditional double-entry accounting system. In triple-entry accounting, all accounting entries involving outside parties are cryptographically sealed and linked via a smart contract to a third entry.
The use of Blockchain-based triple entry accounting makes it almost impossible to compromise the way traditional accounting systems are easily hacked and records compromised.
Blockchain is transparent, audit-able and immutable thus a blockchain-based accounting system would be impossible to corrupt once transactions records are entered into the 3rd entry's smart-contract ledger.
Blockchain-based Accounting May Sack Auditors
Auditing is only on demand because companies do not trust their accountants. Accountants are humans thus are possible to compromise, and after-all, humans are to err.
Accounting records are also possible to compromise. Auditing by an external, independent auditor is therefore necessary.
Blockchain-based accounting systems are transparent, auditable and immutable; which means transactions can hardly be compromised. This means if account records are stored on a blockchain, it may not be necessary to invite an external auditor to proof or validate.
So auditors may be hardly needed in future!!