It is a fact that technology is transforming the mode of business operations, from fast mode automation to flawless output, everything is a blessing of technology. One such technology that has impacted businesses like never before is Blockchain. This distributed ledger technology paves the way for a new set of developments that will improvise the conventional technological platforms.
As per IBM, around 66% of all the banks will have commercial Blockchain products; however, the application of Blockchain is not merely limited to finance. As per the Market and Markets report, the worth of Blockchain is expected to become more than $2 billion by 2021. Amongst the different industries that will be impacted by Blockchain Technology, we have the work of auditing.
Blockchain’s impact on different businesses is evident from the fact that most of these are trying to use it for their benefit. Here we are highlighting how will it show its impact on auditing work:
1. Change in the role of auditors: One of the first changes that Blockchain is going to bring in the world of auditing is that the role of the auditors will change to the analyst. They will be interpreting the data that is recorded on the Blockchain and will deduce the inferences from the same. Compliance auditors will assist in handling the identities of the individuals, companies, and linking the same with the assets.
Besides, traceability with the provenance of goods will also allow the auditors to trace an asset over time and will also provide proof of transactions in real-time.
2. No data alteration– One of the key works of any auditor is to ensure that every information on the ledger is right and unaltered. With the conventional system, there is no guarantee of authenticity, as there is a greater potential to impact and alter the data. But with Blockchain, you don’t have to ponder over this fact. All the information entered in the DLT is encrypted cryptographically, thus assuring that the data is absolutely safe and free from a data breach.
3. Data security- What makes Blockchain so imperative for auditing work is that it allows data security. One of the prime concerns of any auditor is to ensure that all the data in the ledger is correct and free from any errors. The best way is to opt for a method that is infallible and secure. Blockchain is that platform. Since the data is encrypted and is time-stamped. Any change or alteration in data will be easily reflected in the ledger, thus ensuring complete data security.
With all these features, it has become evident that Blockchain is one of the best choices for auditing and allied work. Every finance professional would be required to know about Blockchain and how to use the same for auditing work.