Ledgers image via Shutterstock
Accounting and business consulting firm Armanino launched a new blockchain-based tool Wednesday promising firm-originated financial audits in seconds. Called TrustExplorer 2.0, the product is one of several promising to overturn how accounting is done within companies.
Which is hardly surprising: by definition, “ledger technology” should improve accounting and provide a competitive threat to the way things are done today. Blockchain and accounting are made for one another, as much of the industry acknowledges.
Aramamino’s TrustExplorer is an auditing protocol offering real-time, distributed, and final audits, according to Armanino partner Andries Verschelden. “We have this digital ledger that becomes the single point in truth capturing all these transactions,” Verschelden said in a phone interview:
“You open up the possibility of real-time audit and being able to provide transparency.”
Blockchain technology offers immutability ( permanence) and accessibility (wide distribution of data-entry points). Armanino has been trialing its suite with accounting and finance firms over the last year, Verschelden said.
Armanino is one many projects in the accounting industry taking advantage of blockchain, including at big firms like PwC and Deloitte. Blockchain technology can automate the capture of accounting data and verify its accuracy, reducing the risk of alteration or corruption. Deloitte said in a 2016 report:
“Since all entries are distributed and cryptographically sealed, falsifying or destroying them to conceal activity is practically impossible. It is similar to the transaction being verified by a notary – only in an electronic way.”
Verschelden said accountants have no need to fear for their jobs just yet. Instead blockchain will make their lives easier (in theory anyway). Instead of doing tedious handwork and number crunching – which often takes weeks to months – firms can get an expert view of their finances in seconds. For final audits, however, accountants will still come in to employ traditional methods for a more nuanced approach to risk management and financial inspections.
“Our industry is slow to embrace technology and has really looked at technology and blockchain as a threat than an opportunity,” Verschelden said. “[We asked] how did the blockchain change the audit process and how did it improve it?”