New White Paper Identifies Potential Blockchain Implications for Audit and Assurance

A new white paper, Blockchain Technology and its Potential Impact on the Audit and Assurance Profession, from Chartered Professional Accountants of Canada (CPA Canada), the AICPA and Waterloo discusses how financial statement auditing might evolve with blockchain technology and also considers new assurance services and future roles for CPAs. The paper was authored by several leaders in blockchain technology from Deloitte’s U.S. audit and consulting businesses, as well as blockchain leaders of Deloitte Canada, CPA Canada, the AICPA and Waterloo.

The white paper concludes that while blockchains are unlikely to replace judgments by a financial statement auditor, “CPA auditors need to monitor developments in blockchain technology because it will impact their clients’ information technology systems; and work with experts to audit the complex technical risks associated with blockchains. CPA auditors should be aware of opportunities to leverage their clients’ adoption of blockchain technology to improve data gathering during the audit and should consider whether blockchain technology will allow them to create automated audit routines.”

“Change comes quickly,” says Gord Beal, vice president of research, guidance and support at CPA Canada. “Anticipation, early understanding and integration of innovative technologies is critical to the success of our members and the organizations they serve. Blockchain is already starting to affect CPAs and its impact on the profession is anticipated to grow. We are committed to providing guidance to help CPAs navigate these changes and create opportunities for the future.”

“This white paper sheds light on a key technological development that CPA auditors in North America – and around the world should stay abreast of,” says Susan Coffey, Association of International Certified Professional Accountants’ executive vice president for public practice. “Blockchain is bringing new challenges and opportunities to the audit and assurance profession. As the paper makes clear, CPAs will need to evolve their skillsets and knowledge to meet the anticipated demands of the business world as blockchain and other new technologies are more widely adopted.”

“There is no doubt that blockchain technology, cryptocurrencies and smart contracts have captured the imaginations of people around the world,” says Efrim Boritz, professor, School of Accounting and Finance, University of Waterloo, director, UWCISA. “The University of Waterloo’s Centre for Information Integrity and Information Systems Assurance is monitoring developments in this area and conducting research to ensure that we understand the strengths and weaknesses of these technologies – to look beyond the hype – to help decision makers make sound choices when considering the opportunities and risks represented by these technologies.”

The white paper contains a call to action that urges CPAs, including those in auditing, to continue to monitor developments in blockchain technology. Additionally, CPA Canada and the AICPA encourage auditing and accounting standard setters to monitor progress and adoption of blockchain technology in the business ecosystem. The CPA profession needs to envision the future skills that will be required to allow CPAs to meet the demands of the market in a business world where blockchain technology is widely accepted.