5 things CPAs need to know about Blockchain

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5 things CPAs need to know about Blockchain

As companies and businesses are coping from arguably the most drastic financial crises since the 2008 financial crisis, the need for CPAs and their skills for business recuperation is well known. While CPAs pack the capability to help businesses in various aspects for renovations and growth, it is particularly important for the people in the finance world to be versed and prepared for emerging trends of the future. This includes the disruptive technology of blockchain in the financial world. While the aversion and acceptance of it is a continuing debate, it is best to assume that blockchain technology and its nature of decentralization have already affected the traditional financial ways.

In a company, CPAs deal with audits, prepare tax returns, and prepare and review financial statements among other things. With the potential disruption that could be caused due to blockchain technology, CPAs will need to be aware of how it could affect them before conclusively about the tech in finance is established to include in curriculums.  

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Here are 5 things that CPAs need to know about blockchain technology and its effects on the profession.

Blockchain is a database run with a peer-to-peer network of computers. It works in a decentralized manner to chronologically document transactions. The features of blockchain cater to accounting in a number of ways. As accounting deals with the analysis, measurement, and communication of financial information, blockchain technology will provide CPAs clarity over ownership due to the transparency of the blockchain. Using blockchain will also help in improving efficiency.

Reduction in cost and work
Blockchain has the potential to reduce the cost of maintaining records. Recordkeeping and the time invested in it could become a thing of the past. Blockchain will give CPAs and accountants clarity about the resources of the organization. CPAs will now have absolute certainty about ownership and the history of the financial assets they deal with. Since blockchain doesn’t require record keeping, CPAs could do away with the tedious task and focus more on valuation and planning to grow the businesses.

Increased demand for CPAs
Blockchain could prove to become a replacement for record-making and bookkeeping of numbers. This could eliminate the tasks in those areas in the accounting profession. However, CPAs are known to add value to companies in other aspects mainly and are not just limited to accounting. The proficiency held by CPAs in guidance, investment decisions, and growth-based decisions will now be favored more by companies with the inclusion of blockchain technology.

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Drastic changes in auditing

If companies include blockchain technology, the financial status, transactions, profits, and other financial figures will be easily visible. This could have drastic implications on auditing and external auditing in particular. Performing audits of financial changes and status could become unnecessary. The role of an auditor will then become that of using their knowledge of finance and business to monitor and judge transactions, credits, expenses, creation of assets, and focus on other crucial business matters. 

CPAs at the forefront to incorporate blockchains
CPAs are known for their knowledge about the financial world, intricacies of the business world, practical applications, etc. The inclusion of blockchain will require requisite development, standardization, and optimization. CPAs could play a major role to integrate blockchain in the financial industry. With the need for traditional skills omitted due to blockchain, skills like advisory, value, and growth adding abilities like that of CPAs will be preferred increasingly.

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