Ever since the double-entry bookkeeping system was created in 1340, accountants and business owners have been focused on the fidelity of financial reporting systems. The double-entry system prevented misreporting and forced accounting to be reliable. With more reliance on computerized information systems, more reliable information is imperative. The blockchain database structure is designed to achieve this reliability.
What started as a theoretical vision of integrity in recordkeeping has evolved into a distributed database structure with high fidelity of information quality and availability. This database structure could help prevent and detect fraudulent transactions by trading parties. The blockchain concept carries some risks, but with a built-in audit trail, these risks are manageable. The implementation of blockchain technology into corporate information systems is in its early stages, but it is likely to be adopted by diverse businesses, large governmental agencies, and various exchanges. Once mature and widely adopted, blockchain may bring about a “system of systems,” or a master “journal of journals.” Accountants, managers, and educators can play a pivotal role in this growth opportunity, and should be familiar with its basic tenants: an independent database self-validating a single ledger.
More at: Blockchain: The Making of a Simple, Secure Recording Concept – The CPA Journal
The Financial Accounting Standards Board (FASB), a financial accounting standards body in the US, is reportedly considering whether to undertake a new initiative on digital currencies.
According to Reuters, the FASB – which sets accounting standards for publicly traded US firms – hasn’t yet decided if it will develop new guidelines for companies dealing with bitcoin and other cryptocurrencies. However, the non-profit is apparently assessing whether it should begin that process following a request from the Washington, DC-based Chamber of Digital Commerce (CDC) – a trade organization for companies and groups working in the digital currency and blockchain space.
In a letter to the board, dated June 8, CDC founder and president Perianne Boring argued that the lack of standards is creating a barrier for both investors and entrepreneurs:
“The absence of accounting standards for digital currencies is a mission critical issue for companies seeking to invest and innovate in this exciting technology frontier and may hold back economic growth in the United States.”
More at: US Accounting Standards Body Weighs New Digital Currency Rules – CoinDesk
While the landscape for blockchain technology is still in its infancy, its potential is transformational and has led to entities across industries to experiment and embrace it. The ‘Big 4’ are no different. The four largest accounting firms in the world, dubbed as the Big 4, are active members of the blockchain revolution that’s all set to fundamentally change the way traditional services are offered and how businesses operate.
Here’s how each of these firms is engaging with Bitcoin and the blockchain technology.
Deloitte uses the words ‘enigma,’ ‘paradox,’ and ‘opportunity’ for blockchain technology. In 2014, Deloitte launched Rubix—a blockchain offering that provides advisory services and builds distributed applications for clients across sectors, including the government.
In May 2016, Deloitte’s first blockchain lab was created in Dublin followed by a second hub in New York in January this year and more such announcements are expected. Deloitte joined the Ethereum Enterprise Alliance (EEA) and the Hyperledger Project by the Linux Foundation in May 2017.
One of the very recent and interesting announcements has been the partnership of Deloitte CIS (Commonwealth of Independent States) with Waves Platform for “providing clients with comprehensive initial coin offering (ICO) services and customized blockchain solutions tailored for specific business tasks.”
More at: ‘Big 4’ Accounting Firms Are Experimenting With Blockchain And Bitcoin – Nasdaq
Lots of people speculate about the next big innovation that will take their industries by storm.
In the realm of accounting and finance, there is a major technology often misunderstood by professionals that could dramatically change the game for the financial services industry.
That technology is blockchain.
More at: The Technology That Will Change Accounting – Forbes Investing #Cutting Edge
Blockchain could change the way accountants generate revenue, according to a report published yesterday by the Association of Chartered Certified Accountants (ACCA).
The group, which boasts more than 180,000 members worldwide, said in its report that the kinds of services accountants provide may evolve depending on how the technology is adopted. These changes, the report’s authors note, may impact the income of accountants as well.
While the report notes that “it will take time” to see how distributed ledger adoption affects revenues for accountants, it does caution that “the most likely effects on the revenue mix may be clear sooner”.
The report’s authors write:
“There may be a gradual move away from low-margin activities (for example, transaction checking) towards a greater emphasis on higher-margin work (for example, interpreting technical accounting policy to a given situation). Over time, this may affect the revenue model, with greater emphasis on paying for expertise and advice (outputs-based rate card) rather than for time (inputs-based, per hour billing).”
More at: Certified Accountants Say Blockchain Could Change the Way They’re Paid – CoinDesk