One of the responsibilities I have with CPAI is to work with our A&A members as we plan and develop the agenda for our A&A Conference. The 2018 A&A Conference Planning Committee has done an incredible job getting our June 2018 Conference organized. Topics have been determined, speakers have been lined up, and evening activities should be exceptional. My point here is not to necessarily promote the 2018 A&A Conference (even though that is part of my responsibility) but to simply throw out some thoughts on a few topics we have scheduled for next year’s conference.
In June 2018, the CPAI A&A Conference Planning Committee has devoted time on the agenda for presentations concerning artificial intelligence, “blockchain” accounting, data analytics, and cybersecurity. While each of those are somewhat familiar to all of us, I personally find “blockchain” accounting the most fascinating. Reading and attending CPE relative to “blockchain” accounting has helped me somewhat understand it.
What is “blockchain” accounting? I have seen and read a number of definitions and theories. The best explanation I have heard is from Trace Mayer, a Bitcoin investor who describes it as, “a globally distributed decentralized ledger that everyone has the exact same copy of.” Without spending any time discussing that, imagine the concerns if such a ledger existed? To alleviate one concern, data privacy would be maintained.
It is not hard to imagine the possibility of a “global in the cloud” ledger for ALL transactions regardless if it’s a financial transaction or other transaction that has value, i.e., contracts and similar agreements. We already operate in similar fashion with our banking, investment, general and dub-ledger applications, medical applications, our own client electronic file cabinets etc. Then consider what companies such as Amazon, Airbnb, and Uber etc. have done. Has the internet become a source of information or a source of value through expedited business transactions? How close is Google to being able to this now?
But the real concern for CPAs could be any, if not all, of the following:
- Is a world-wide ledger possible for ALL businesses, countries, cultures etc.? My thought – Sure, but probably not in my lifetime. Evidence that “blockchain” may be problematic implementing as to require the agreement of countries, governments, and cultures today may be Brexit.
- Would clients file tax returns? My thought – as in the current trend with The IRS’ current “document matching program” perhaps not. But, for sure, clients would still need their CPA to advise them on what to buy in order to maximize tax deductions and credits.
- Would there be a “currency?” My thought – I am not sure, but the introduction of the Bitcoin as “global” currency that seems to gain acceptance daily makes me think a “currency” as we know it today would not exist.
- Couldn’t the “blockchain” be hacked? My thought – as I understand it, all of the transactions recorded would have to be unwound across millions or billions of computers.
- Lastly, could accountants/auditors become extinct due to a variety of reasons such as ALL financial transactions are now accessible in real time? My thought – the audit would not be a transaction driven process, but could become a process in which financial trust is still needed by stakeholders, but may be easier to achieve.
I do want to emphasize that I am not suggesting our profession would disappear. I have long believed, and have said this before, that the ability for accountants and auditors to look forward through the front window instead of looking back through the rearview mirror will make our services even more invaluable and probably will be required some day in the future. I do believe we need to watch, learn, and participate in “blockchain” opportunities. Our clients surely will.
To think that there could be a day when the client’s records are not in a shoebox, what a day that would be! Will we finally have an answer to the question, “Do all of the debits and credits in the world balance?”