A virtual and digital 'blockchain' exploding over a smartphone being held be a hand

CPAs will be able to make significant contributions to blockchain, including ensuring transactions reflect reality as it occurs and processes are operating as intended. (Production Perig/Shutterstock)

Accounting | The Profession

Is blockchain a threat to the accounting profession? The answer is no.

Here are three reasons why the technology won’t render CPAs obsolete

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Blockchain has the wind in its sails. According to a World Economic Forum survey, 10 per cent of the global GDP could be stored on blockchain technology by 2027. That said, there’s no reason to think it will render CPAs obsolete. Here’s why:

1. The shift is occurring slowly

Louis Roy, CPA, CA, assurance partner and blockchain technology leader, has been with Raymond Chabot Grant Thornton (RCGT) for more than 20 years. Three years ago, he convinced the firm to launch Catallaxy, a subsidiary offering blockchain transformation services to businesses.

“Change is taking place, but very slowly,” he says. “The reason is simple: implementing blockchain requires changing a company’s entire ecosystem, including that of its partners, which is no easy task.”

Right now, businesses most interested in blockchain are those who stand to win big from it, such as banking institutions, for example, who still have entire teams reconciling accounts.

Eric Nguyen, senior manager at RCGT and leader of the firm’s Artificial Intelligence and Advanced Analytics practice, agrees: “Although blockchain technology holds great promise, many entrepreneurs are still unclear as to how it can add value. We all know how difficult it is to implement change internally, so just imagine imposing a change of this scale on clients or suppliers.” In other words, SMEs who don’t need decentralized systems have no interest in changing rapidly.

And yet, blockchain offers exciting opportunities: better traceability in manufacturing, improved natural resources management, more secure and seamless cross-border travel, and so on. The health-care blockchain market alone is expected to reach more than US$829 million in 2023 from US$53.9 million in 2018. 

2. People never fully trust machines

Blockchain is still a bit of a mystery to the public at large. In fact, last winter it was confused with bitcoin, when speculation in the cryptocurrency was at its highest.

What’s more, despite warnings from institutions like the Autorité des marchés financiers (Quebec’s securities regulator), the first “initial coin offering” (ICO) was marred by widespread fraud—ironic, given the technology’s highly touted security features. But, according to Nguyen, this was a blessing in disguise. “It will push the industry to be more transparent and adopt stricter rules,” he says.

And that’s where CPAs will make a difference—by making sure that transactions reflect reality as it occurs and processes are operating as intended, including in the area of smart contracts, where Roy believes CPAs can clearly position themselves as leaders.

3. Adaptability is part of every CPA’s DNA

With time, blockchain training will become commonplace. In fact, as a sign of the times, the CFA Institute recently added topics on cryptocurrencies and blockchain to its Level I and II programs.

Nguyen, who holds the CFA designation, is happy with this recent development. He has also notes a growth in teams specializing in technology and cybersecurity. “The problem with blockchain isn’t the technology, but the security around it,” he says. Blockchain will also create additional assurance and integrity verification needs. (Find out more about the technology’s potential impact on the audit and assurance profession.)

Smaller firms may find it harder to adapt, but again, that will depend on their needs. The good news is that any well-equipped finance professional will know what questions to ask: “Has our organization heard about blockchain technology? Is there a need […] to develop a blockchain strategy? Would it be appropriate to become a member of a related industry consortium, if applicable? Is there a business case for experimenting with blockchain technology? Have we identified possible blockchain applications for our industry and organization?”

These are a few questions that are never too late nor too early to ask.