Blockchain and audit: where we can find the connection between them?
Companies, markets, and countries are striving for business transparency.
With the advent, spread, and improvement of blockchain technologies, it is becoming easier to ensure this. Let’s consider what is the connection between blockchain and audit, and who will benefit from such achievement of humanity.
Prospects for the future technologies
Reporting to regulators and preparing an extensive package of documents for the bank forces businesses to hire additional employees. However, the human factor still causes a number of mistakes in such important documents, which sometimes leads to very undesirable consequences.
If you run your business transparently and you are not afraid of the audit, then there is great news for you. Blockchain allows you to solve all these problems. This technology means that information about transactions, contracts, and other important data will be recorded in the general register in real-time. This will allow you to automatically pass even the most rigorous test. It refers not only to audit transactions made between the companies, but also to be controlled by government agencies. In fact, the latter only works in favour of a company, because, with help of this approach to accounting and finance, you can verify all the necessary data much faster.
Accordingly, the process of automatization will lead to the evolution of the accountant and auditor, as well as to a change in their role in the company. At the moment, the active spread of the blockchain is impeded by the lack of clear regulation and standardization. At the same time, Ukraine’s course to legalize blockchain technologies and recognize cryptocurrencies is promising. We will probably soon approach other countries where services such as blockchain consulting and blockchain solution auditing are already provided.
“I am confident that the blockchain will change a significant part of financial methods and exchanges, in 40 years the blockchain and everything connected with it will occupy a more prominent place than bitcoin”
Larry Summers, former US Treasury Secretary
Blockchain in business
The essence of the blockchain for business is that digital information representing data about transactions, contracts, contact databases, etc., is stored in the form of consecutive interconnected blocks. At the same time, authorized users have full access to the specified data in real-time. Therefore, they see not only the addition of certain information to the system but also its deletion, which eliminates the possibility of unnamed cleaning.
In addition, the use of blockchain in the settlement transactions of the enterprise leads to significant savings on operating costs. The most promising for the use of the blockchain experts consider lending P2P (Peer-to-Peer), dispute resolution, order management, promotion of goods, accounting for fixed assets, and acts of reconciliation.
“Bitcoin is an amazing cryptographic achievement. The ability to create something that cannot be duplicated in the digital world is of great importance. “ Eric Schmidt, CEO of Google
What are the Blockchain Nodes?
This is a joint project of KPMG International and Microsoft, launched in 2017. The companies announced the launch of joint Blockchain blocks, which allow the implementation of blockchain technology in business processes. The first such examples were in Frankfurt and Singapore. New York also was in the plans. The expansion should be driven by a global alliance that combines Microsoft’s technical expertise with KPMG’s deep industry and blockchain applications, as well as strong links with startups and developers.
The priority here is financial services applications to thoroughly explore how blockchain technology can optimize business processes and models for the healthcare, public sector, and other industries in the future.
“In order to make it really significant, we work with innovative startups to develop options for the use. This means a wider range of solutions to the challenges that blockchain implementation constitutes for financial institutions and other industry players, ” said Lyon Poe, Head of Digital + Innovation, KPMG in Singapore.
“Along with KPMG’s experience in successfully transforming business models, we are committed to innovative applications of blockchain technology that will help our customers around the world achieve their strategic goals,” said Marley Gray, Azure Blockchain Engineering’s Chief Program Officer at Microsoft.
To what, apart from the transparency of accounting and auditing, do such global changes and projects lead?
Here are the main points:
- infrastructure development to simplify international transactions;
- the emergence of a new class of assets in the form of digital property;
- change of management principles;
- development of a new regulatory framework with its further integration into the legislation of the countries;
- significant acceleration in transactions, as well as reduction of risks associated with this process.
