How Blockchains Will Change the Accounting Professions

According to CPA Canada, blockchains represent the biggest technological revolution that has taken place in the accounting profession since computerization of bookkeeping… We discuss the issue with Jean-François Audet, associate accountant and vice-president of the Groupe Fuller Landau.

The principle is simple. A blockchain is a digital register where “blocks” of information are recorded one after another. What makes a blockchain unique is that each block is copied and recopied on multiple computers, making an unauthorized change impossible.

“The result is that we have a digital ledger that is highly secure, ultra-reliable and accessible to anyone with a computer,” explains Jean-François Audet.

The accounting world will be one of the first sectors affected. “It is certain that on the day when companies use blockchains to do their accounting,” continues the accountant, “our work as auditors will be much faster. All the information will be up to date and available in real time. There will be no more need to wait sixty days after the year end to begin the analysis.”

These are some possible uses of the blockchain. There are several others – blockchains can also be used in the form of cryptocurrency and to control financial transactions.

“The beauty of the blockchain,” points out Jean-François Audet, “is that each transaction has to be counter-validated by all parties involved. A transaction can therefore be done without the intermediary of a bank. It’s faster and less expensive, since you save on transaction fees.”

A bridge to automating processes

At this point we are just beginning to see all the applications for blockchains. That’s what we learn from the report from CPA Canada, Technological Disruption of Capital Markets and  Reporting? An Introduction To Blockchain

It explains that the well-known digital register can not only contain financial transactions, but also directives, procedures, actions to be taken, when conditions are fulfilled by the authorized stakeholders of the blockchain.

One can thus imagine the emergence of “intelligent contracts”, where billing for goods and services between individuals or businesses would be done automatically and simultaneously, as soon as the stock is delivered.

This automation of processes will bring many changes to the accounting profession.

Repetitive tasks are likely to become highly automated,” concedes Jean-François Audet. The profession should therefore focus on activities that have added value, including the issues of cybersecurity and verification of the [accounting] protocols that are embedded in the blockchains.”

 

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