There is definitely a long way to go in this discussion - there
are still many unknowns about how the technology will develop, how it might be
adopted by businesses and how it could impact on accountants. But here are a
few thoughts I took away from the evening (picture of the panel below).
Firstly, it’s helpful to recognise the different strands of
debate around blockchain technology. It may have all started as a political
critique against centralised control, and a push for more open and
decentralised systems. But the interest of the corporate world is really on
private blockchains that are simply more efficient, resilient and secure than
systems based on centralised databases.
Linked to that, is the question of why and when blockchains
really are the best solution. I can see that where very high levels of
integrity are required, the inherent security of blockchains can be very useful
- tracing the provenance of food supply chains, for example. Likewise, I can
see that a shared ledger between banks could massively simplify inter-bank
payments systems and processes, getting rid of lots of reconciliation activity and
producing substantial efficiencies. But there were some interesting challenges concerning
the specific benefits and drivers for adoption across the broader businesses
environment. What is the business case for investing in the substantial
technological and process change that would be required?
Another point that merits further discussion is the impact
on accounting and auditing. If financial transactions ultimately all move onto
a blockchain platform, and are validated through cryptology, what would the
auditors do? Panellists suggested that there would still be a need for assurance
over the ‘black box’, to build trust that the system is working as expected. There
would be a need for assurance over the governance model – who is able to update
the blockchain and are the permissions working as expected? There would also
still be a need for assurance over the judgements made in the financial
reporting process. But the process, scope and focus of audit would be very
different, as would the skills required of auditors.
So, it was an interesting debate which raised more questions
than answers for me. I haven’t quite bought into the view that the future is
all about the blockchain, although I can see how it can be a very powerful
technology in some contexts. But if we do move into a world built on blockchain
technology, it would be a radical change for the profession and much more
thinking about the application and implications are needed.