Blockchain technology has become an important part of the enterprise world as its advancements and adoption have never been more critical.
This endeavor is getting a lot of help from the Accounting Blockchain Coalition (ABC), the coalition that aims to educate organizations and companies on accounting information related to blockchain or digital assets.
The ABC provides institutional support for groups that want to enter the blockchain world.
Some of the bigger members of the coalition are Microsoft, ConsenSys, Crowe LLP, RSM, BDO USA, BPM USA, RSM, Michigan State University Eli Broad College of Business and Vertex Inc..
BDO and BPM for example are very big accounting companies in the United States. BPM is part of the top 50 accounting companies, while BDO has over 60 offices nationwide.
The main target of ABC is to guide organizations through the process of implementing blockchain, lay out good practices and serve as a knowledge base.
When it comes to adoption, the coalition has now introduced a new risk assessment tool that helps accountants, CFOs, compliance teams and auditors in evaluating blockchain technology and digital assets. In addition, the tool also suggests activities to mitigate threats.
An obvious step towards legitimization
The very existence of ABC is definitely a step in the right direction towards the legitimization of blockchain technology in huge corporations.
Bennett Moore who is co-chairman of RSM US and the co-chairman of ABC’s IC Working Group commented that the aim of the new tool is to help people who think of taking a risk assessment of some processes connected to the use of blockchain.
Thus, the tool will be very useful for companies that are using or will use blockchain technology as it will aid them in evaluating explicit considerations on their organization and their usage of digital assets.
The tool is different than all previous attempts because it is the first to provide instructions on internal control activities. Another unique step is that the tool will give suggestions on how to reduce identified vulnerabilities and threats.
What is so great about this tool?
The inclusion of blockchain into modern business has reached such a level that it will be foolish for enterprises to ignore it. Still, regulations are not that clear cut and specific guidance is needed, in order to avoid falling into some kind of trap. This is the gap which ABC’s tool will fill.
IC Working Group’s co-chairman advocated the target of the tool:
“As blockchain technology continues to mature and deliver real business value to enterprises, it will be paramount that businesses leveraging the technology understand both the new and traditional related IT risks. The value of blockchain technology is still primarily process-driven. Enterprises will need to maintain detailed, secure, and efficient processes to properly take advantage of its benefits while maintaining compliance with regulators.”
According to him the exact focus of the tool is to “help businesses exploring the use of this technology understand the common processes, the associated risks to be aware of, and some potential internal control activities, from a broad perspective, that might be useful in mitigating those risks”.
The link between blockchain and accounting
As RSM US’s Bennett Moore thinks, accounting and blockchain are linked in quite a lot of ways and it is no surprise that the accounting sector is getting involved with the new technology. According to him:
“The development of this tool certainly points to the fact that the accounting industry is paying attention to this technology and its current and potential use.”
“The development of this tool shows that accountants have already been taking the first steps to understanding how the processes associated with blockchain’s use are both new and familiar parts of existing IT risk frameworks. As the use of blockchain continues to proliferate, it will provide new opportunities to match authorizations, supporting documentation, journal entries, and the value transfer components of a business’ transaction on both sides near instantaneously.”
And when it comes to the legal side it will be very important for businesses to plan ahead for any “associated risks of using blockchain technology”.
What else does this tool tell us?
The launch of the new tool tells us that the big corporations are done with the experiments and exploration attempts and are now figuring out how to make correct and meaningful steps in using blockchain. Moore’s opinion is no different:
“The vast majority of enterprises engaged in trade organizations like the Accounting Blockchain Coalition are not only evaluating blockchain technology, but also building solutions using the technology.”
Moore’s views on the link between the accounting and other sectors and blockchain are showing us where the world is headed:
“Accounting firms are building auditing, taxation, and general accounting software solutions using blockchain; technology firms are building software tools to re-think the backend of and the concept of ownership in financial services, supply chains, and numerous other industries; and educational institutions are not only educating on the value of the technology, but also using blockchain to issue degrees and proof of certifications to students’ new smart identities.”