Accounting for Technology: The CPAs Guide to Blockchain and Cryptocurrency (Currently Unavailable)

Many say the accounting profession is set to play a key role in driving the adoption of this new technology to both privately-held and publicly-traded companies. But what exactly is blockchain? In short, Blockchain is a global digital ledger of economic transactions that is transparent, continually updated by countless users, and considered by many as almost impossible to corrupt or hack. What are the components that make up this technology? How does this apply to accounting professionals? You’ll get that knowledge here! You, as an accounting/auditing professional, can decide the fate of how the adoption will come to fruition. Blockchain has the potential to significantly disrupt the business sector and the public accounting industry in the next three to five years.

Blockchain technology offers the promise of digital truth. When properly implemented is offers a transparent, permanent, immutable, and high-speed record-keeping system. The possibilities are endless, from managing the logistics of supply chain networks to facilitating international commerce. The adoption of this technology is growing with millions of new users every year. Organizations are adopting this technology every day to help improve their existing operations through its ledger capabilities or executing smart contracts. Cryptocurrency is one example of blockchain technology. Its growth and value have exploded to over $2 trillion in the last few years. This growth has helped to fuel widespread adoption amongst Wall Street and regular investors alike.

Blockchain ranked as the #1 most “in-demand hard skill” on LinkedIn for 2020. As businesses explore the enticing possibilities from blockchain ledger technology, there are important questions being raised about how assertion-based auditing may be impacted by the introduction of blockchain technology into financial reporting? The nature of distributed ledger technology suggests that the auditor’s view of both inherent risk and control risk and the related assertions might be affected when a client operates in a blockchain-enabled environment that supports a substantial part of its financial information system.

Blockchain ranked as the #1 most “in-demand hard skill” on Linked in for 2020. Although this distributed ledger technology is still in its infancy, blockchain has great potential for market disruption because of the methodologies it uses to authenticate and record transactions. Embedding self-executing code into permissioned blockchain systems provides a whole new landscape to image what is possible through blockchain technology. Real estate, land, and automobile titles, digital voting, expediting energy futures trading, tax regulation and compliance, tracking assets or even the tracking of prescription drugs can be reimagined because of the power of blockchain technology.

Technology is changing the way we live; it’s making our lives easier (and occasionally more stressful) and we are doing things in ways we would never have imagined just a few short years ago. Words like Uber, Airbnb, robotics, and blockchain were not part of our everyday lingo. AI was something science fiction authors wrote about and shared workspaces was an alien concept. But that is the world we live in now. It would be unrealistic to not expect the same changes in our professional lives.

Cryptocurrencies, such at Bitcoin and Ethereum, are just two of thousands of emerging solutions to create frictionless global transactions between counterparties. Additionally, cryptocurrencies are positioning themselves to become the “new gold” of the modern world as a store of value and immune from geo-political risk. The rise and fall of cryptocurrency prices has not deterred interest in the technology or the space, but is leading to every more practical, accessible and useful applications of blockchain technology.