Accounting has always been impacted by digital technology, but digital technology, in particular, is set to transform how accounting is done on a basic level.
Although there is much to be written about how blockchain works, accountants should be aware of its primary purpose: to keep a ledger of financial data and to transfer ownership of assets in a secure and verifiable manner. A distributed ledger is built into the architecture of blockchain technology, ensuring the trust of all parties involved, and the strong cryptographic foundation demonstrates that, when implemented properly, the blockchain technology provides essentially unbreakable protection, Even though the underlying technology is a little mysterious, the value of this technology should be obvious to accountants:
- Automating transactions with less error in data on both sides of the transaction
- Less fraud and more trust in transactions
- increase in transaction security and less bad data
The application of blockchain in the financial sector is still mostly in the exploratory stage. Almost all major financial institutions are looking at how to effectively integrate blockchain technology into their infrastructure, with IT behemoths with ties to the financial sector beginning to roll out a variety of products. Accounting professionals don’t need to know everything there is to know about blockchain technology just yet, but it’s absolutely time to keep an eye out on advancements, at leat inside your company, Varady, for example, has already developed bridge technology that connects crypto assets, exchanges, and accounting software.
Effects on Auditors
As an accountancy expert, you’re likely relied upon for your skills in keeping records, ensuring standards are met, and dealing with complex regulations and rules, because of how trustworthy blockchain technology is, it’s having an impact on how auditing is done.
if you plan on becoming an accountant, having an understanding f how the blockchain affects accountants is important, furthermore accounting with blockchain experience can serve as consultants by helping their clients navigate both implantation and regulatory issues related to blockchain technology. Contrary to what may be supposed of tech erasing opportunities, the automation of auditors allows for bookkeepers and accounting professionals to increase their advisory services to interpret results and train clients.
Increased demand for cryptocurrency
The subject of cryptocurrency is complex, and its decentralised nature means there are a number of regulatory issues accountants will eventually have to deal with, furthermore, governments are typically reluctant to fully embrace financial and monetary changes that they can export little control over. However, the widespread and growing use of cryptocurrency among organisations of all sizes mean accountants need to be able to work with clients who invest in or trade cryptocurrency, and some knowledge of blockchain technology is essential for understanding their motivations and behaviour.
The next effect of this rapidly increased usage of blockchain in financial transactions has created a huge demand for interpreting and understanding text effect of blockchain-related transitions. A new offshoot industry has already been created for this.