Any discussion about Blockchain notes that because this digital ledger platform allows the input of data to be widely shared, continuously and instantly updated and unable to be altered, it seems destined to transform the work of accountants, bankers and auditors. It’s been embraced by the largest accounting firms and banking groups and although has not yet been mainstreamed into mid-size and smaller firms, no one doubts it’s here to stay. That much seems to have wide agreement. To get a perspective on blockchain’s current impact on the accounting industry, we offer our readers a look at the issue extending through our two top articles, in our Lead, and continuing in our Small State, Big Impact feature, so that we can give adequate coverage to two prominent financial tech executives we interviewed. In devoting most of this edition to how blockchain may impact the accounting industry, it’s been revealing to learn very few firms and professionals in Rhode Island, in both the accounting industry and banking, seemed to have a strong familiarity with the technology’s practical application and felt it’s not yet mainstreamed into the financial sector.
Therefore, we were grateful for the interview perspectives provided by executives at CitrinCooperman’s offices in Providence. We spoke with Mark DiMichael, Director, Valuation & Forensic Services, and Kevin Ricci, Director, Technology and Risk Advisory Consulting team. Kevin stresses that an across the board understanding of the digital ledger is a central challenge before the platform can be widely adapted.
“Blockchain can certainly cut down on the amount of time needed to do certain reconciliations,” says Kevin. “But if a client uses Blockchain for certain record keeping functions, the auditors will also need to understand the Blockchain, who has control over it, and how it works, just like they need to understand any internal control over financial reporting.”
The Big 4 firms, E&Y, KPMG, Deloitte and PwC, are reportedly expected to invest roughly $400 million collectively into blockchain related development and products in the coming year. PwC has set up a blockchain auditing service, KPMG has developed digital ledger services, and they all are generally accepting bitcoin as a payment method. CitrinCooperman, Kevin says, is now immersed in working with bitcoin in several areas.
“We have accepted Bitcoin from several clients and we can accept Bitcoin Cash (through BitPay)” he explains. “We have many tax clients who invested in crypto/tokens, and we recently accepted our first financial statement audit for a client in the crypto currency industry (a crypto currency custody company). We also have a not-for-profit audit client that received a donation of bitcoin and mining equipment.”