For the majority of its existence, the Internet has enabled users to directly send information to each other (e.g., emails), but has fallen short in its ability to allow users to send assets directly to one another (i.e., without first going through a clearing house). Blockchain removes this limitation by offering a shared online ledger that records verified transactions in a way that cannot be retroactively modified or deleted. In more practical terms, blockchain provides a reliable record of online asset exchanges and can be used to readily identify the current owner of a digital asset. To accomplish this feat, blockchain minimized some common threats to data, including its proper recording and sustained integrity. While the impact of blockchain on various industries is still unclear, there are already significant implications for the accounting and auditing professions.
For accounting, blockchain technology allows trading partners to share a ledger that each regularly verifies, meaning there is consensus that the recorded data represents the true history of transactions as updated on a nearly real-time basis. Users that access this information can therefore feel assured that they have a complete record of transactions, that transactions are accurately recorded, and that the transaction data has not been manipulated in an unauthorized manner.
For the auditing profession, blockchain offers the opportunity to perform less retroactive testing to substantiate account balances because the underlying transactions have already been verified and agreed-to by the trading partners. Students in the Boler College of Business are being prepared for careers in which blockchain will disrupt the way that accounting data is collected, verified, and assured. In doing so, students are gaining increased knowledge about the systems used to observe, record, store, and report data, therefore positioning them to help usher in an era of more real-time access to reliable information.
Mark Sheldon, Ph.D.
Assistant Professor of Accountancy