As we continue our look at blockchain technology with tech executives at CitrinCooperman, we get further perspective on how the consultancy sector may be primed for a big boost from blockchain, especially as it relates to managing cryptocurrency. As Kevin Ricci noted in the Lead article, bitcoin is the cryptocurrency that’s fast becoming mainstreamed. However, it’s as new to the profession as the blockchain digital ledger, and therefore the need for bitcoin management expertise is a rapidly growing niche. CitrinCooperman’s Mark DiMichael, Director of Valuation & Services at the firm’s Providence office picks up the topic from here.
“We have done some consulting in the industry –one of our colleagues is acting as a project manager for an ICO. Also, advising clients on entity structuring for companies in the crypto currency industry,” Mark explains. “If any accounting firm wants to be involved in the Blockchain space, they need to have the right level of expertise for whatever service they are doing. We are, for example, using a forensic IT expert as an outside consultant to help us in auditing crypto currency transactions.”
Mark notes the specialty skills required, which merge accounting and tech expertise, are creating a large professional space in the so-called “fintech” area.“Many consulting firms are popping up in the industry so if firms don’t have the expertise in-house, there are many options for outside consultants. We (and most accounting firms) are not in the fintech consulting business, but if we were to help clients with that, I imagine we probably would need to partner with a fintech consulting firm.”
The cyber security issue is often cited as central to the benefit of the platform. It’s been described as having the ability for information and data to be verified without the threat of being altered or corrupted. At a time when traditional accounting firms are constantly investing in cyber protection upgrades, it would seem firms would be eager to invest in blockchain. Kevin Ricci weighs in here, and emphasizes because the technology’s development is still young, vulnerabilities still exist.
“While it would appear Blockchain is inherently insulated from hacking, there is little doubt that cybercriminals are probing the technology to identify and take advantage of weaknesses,” he cautions. “In addition to human error that can lead to compromises, attacks such as distributed denial of service (DDoS) and routing attacks can, in theory, be used to disrupt communication between nodes, allowing for potential manipulation of data. As Blockchain solutions mature,” Kevin says, “and its advantages and safety are proven, we may see a more rapid adaption by (mid-sized) accounting firms as a result. Blockchain is still in the proof of concept phase for the most part.”
Lastly, for those who view blockchain as a revolutionary tech development that is destined to make the accountant professional obsolete, most industry experts say that’s a bit of hype and CPAs ultimately should not worry. Both Mark and Kevin share the wider view that although blockchain will most certainly transform the accountant and auditor’s role, it will not put them out of business.
“Accountants 30 years ago did not need to use computers. Now it’s a requirement in accounting jobs. We will not be replaced, but our skill set will certainly need to evolve,” agree Kevin and Mark. “It’s nothing new!”