The phenomenal growth of blockchain technology raises both concerns and excitement for the accounting industry. Will blockchain and accounting enjoy a symbiotic relationship? Or, as some suggest, do accountants need to start looking for a new line of work ?



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Advantages of Blockchain technology in Accounting


The blockchain technology promises a lot of advantages for the accounting firms whether big or small. Here are few of the benefits:



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Reducing Errors: One of the biggest advantage of blockchain in accounting is its ability to make almost negligible errors. Once data is in the chain, smart contracts will make many accounting functions automatic, reducing human error.

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Increasing Efficiency: Blockchain is fast and powerful database. Using blockchain, getting data into and out of the system can be done more efficiently than interacting with legacy accounting software applications.
Reduces Cost: Blockchain will lead to increased efficiency and reduction in errors which will eventually lead towards cost reduction. Following initial adoption cost, accounting firms can expect to see rapid cost savings over conventional accounting systems.
Reduces Fraud: The immutable nature of blockchain makes it extremely difficult to perpetrate and difficult to manipulate. In order to modify a record, the same change would have to be made on all copies of the distributed ledger at the same time, which is highly infeasible.
Reduces Time: One key feature of blockchain that accountants should be excited about is its ability to reduce audit time. With the use of smart contracts, many auditing functions can be automated which will reduce the time, an auditor needs to look after the records. The inherent traceability built into blockchain makes auditing fast and easy.

Blockchain as a source of trust can also be extremely helpful in today’s accounting industry. It can be gradually integrated with typical accounting procedures: starting from securing the integrity of records, to completely traceable audit trails. This will lead to a future where the fully automated audits will become a reality.

How Big Four firms are using blockchain

The Big Four accounting firms are leading the way when it comes to blockchain research for accounting practices. Ernst & Young was the first to begin accepting Bitcoin as a payment method, and PricewaterhouseCoopers has joined them. Deloitte and KPMG may not allow for Bitcoin payments yet, but that doesn’t mean they’re ignoring blockchain.


KPMG launched a Digital Ledger Services program in 2016 with the aim of helping financial services companies investigate blockchain application. Last year, the firm partnered with Microsoft to create the “Blockchain Nodes” initiative with the stated goal of identifying “new applications and use cases for blockchain technology.” KPMG is a member of the Wall Street Blockchain Alliance as well.
Deloitte first got into the blockchain game all the way back in 2014 with the launch of Rubix, billed as a “one-stop blockchain software platform.” Since then, they’ve continued to diversify their offerings, exploring initial coin offerings (ICOs), which are similar to IPOs but use a cryptocurrency instead of stock. Their partnership with Waves Platform is poised to make ICOs and crypto-trading more accessible than ever before.


It seems every month we hear about new ways that Big Four firms are dipping their toes into these exciting, uncharted waters. This April, for instance, PwC announced the first ever wide-release blockchain auditing service. The service audits company blockchain services, ensuring they’re using the technology correctly and effectively.


While this might seem like a laundry list, the truth is that we’re at the beginning of the process when it comes to discovering uses for blockchain. Over the next few years, this trend is poised to continue on an upward trajectory.

Conclusion
Blockchain is a new frontier for the accounting and there is still a lot that needs to be figured out and lot that still needs to be developed. Blockchain is here and it’s only going to get bigger. The one who start early will always have the upper hand. Despite the hurdles that lie ahead, it is widely believed that DLT could revolutionize the core infrastructure systems of accounting industry around the globe, thereby bringing in greater transparency and efficiency. It will be interesting to see how the industry develops itself near future.