Blockchain Technology
A game-changer
in accounting?
Introduction
Blockchain technology has the potential to upend entire
industries. Especially the financial sector may undergo
disruptive change. Although this technology caught
the attention of many of the largest financial institu-
tions, use cases still remain in the experimental phase.
This whitepaper lays out the benefits of the blockchain
technology for specific use-cases in accounting across
industries.
Current state of accounting technology
Digitalisation of the accounting system is still in its infancy
compared to other industries, some of which have been
massively disrupted by the advances of technology. Some
of the reasons may be found in the exceptionally high
regulatory requirements in respect to validity and integrity.
The entire accounting system is built, such that forgery is
impossible or at least very costly. To achieve this it relies
on mutual control mechanisms, checks and balances.
The recently emerged Blockchain is a trustless,
distributed ledger that is openly available and has
negligible costs of use. The use of the Blockchain for
accounting use-cases is hugely promising. From simpli-
fying the compliance with regulatory requirements to
enhancing the prevalent double entry bookkeeping,
anything is imaginable.
The giant leap: How the Blockchain may enhance
today’s accounting practice
Modern financial accounting is based on a double entry
system. Double entry bookkeeping revolutionized the
field of financial accounting during the Renaissance
period; it solved the problem of managers knowing
whether they could trust their own books. However, to
gain the trust of outsiders, independent public auditors
also verify the company’s financial information.1 Each
audit is a costly exercise, binding the company’s accoun-
tants for long time periods.
