The Society Of Women Accountants of Nigeria (SWAN) recently organised a seminar for accountant professionals on the new financial technological trends popularly known as Blockchain. HENRY TYOHEMBA writes on this new technology which is gradually taking centre stage.
Blockchain is an open access shared ledger, which has the capability to keep a record of all transactions between parties, and allows all users to agree on its contents. Under this, new information is added in blocks linked to the previous blocks, resulting in a chain of blocks being built. This technology is changing the way that monetary transactions are made and logged by creating a decentralised ledger of all transactions. All records are updated and accessible to everyone in real time, which has serious implications for accounting because it allows for smart contracts, consolidated bookkeeping, standardisation in auditing, security and trust and less paperwork for accountants.
A report by the World Economic Forum suggests that 10 per cent of global GDP will be stored on blockchain-related technology by 2025. This implies that the way transactions are recorded and communicated will completely transform between now and then. It is in order to enlighten the Nigerian accountants about the new development that SWAN organised the workshop themed, “Contemporary Issues In Financial Technology and Taxation: The Role Of Professional Accountants,’ for professionals.” Presenting a topic titled, “Fundamentals of Blockchain Technology-What A Modern Account Should Know,’ Mr Polycarp Abuchi of Btech said the world is moving digital and of course, the financial technology. “Over the years, we have been battling with financial transactions on not remitting transactions instantly but today, there is technology in the world called blockchain that can enhance the way transactions are being run.
“I am recommending that accountants should look into it, even CBN should look into the block chain transaction because this is a trending technology on earth and whether we like it or not blockchain technology has come to stay. So many companies are using it for example, Toyota is using blockchain so even in Nigeria, there is need for companies to key into it.”
There is no question however, that accounting professionals need to learn as much as they can about this technology before it becomes a standard of everyday part of our jobs. This is because blockchain offers a huge opportunity for accountants to position themselves as forward thinking and cutting-edge. According to the president and CEO of CPA.Com, “Blockchain is just the next in a long line of transformations within the accounting world. What’s really happened is the accountant’s and auditor’s role has just evolved.
Blockchain is presenting the possibility of a new type of accounting ledger-one that can be continuously updated and verified without the threat of being altered or corrupted. According to Ron Quarant, the chairman of the Wall Street Blockchain Alliance, “Blockchain now gives us a powerful way to share and access value.”
In fact, a closer look at this year’s Forbes Global 2000 list of the largest public companies in the world reveals that not only are all 10 of the largest public companies in the world exploring blockchain, but at least 50 of the biggest names on the list have all made their own mark on technology first inspired bitcoin companies such as China Construction Bank (CCB), which is using the blockchain platform to streamline the way banks and insurance companies jointly sell some of their financial products.
Of course, the move to a financial system with a significant blockchain element offers many opportunities for the accountancy profession. Accountants are seen as experts in record keeping, application of complex rules, business logic and standards setting. They have the opportunity to guide and influence how blockchain is embedded and used in the future, and to develop blockchain-led solutions and services.
To become truly an integral part of the financial system, blockchain must be developed, standardised and optimised. This process is likely to take many years-it has already been nine years since bitcoin began operating and there is still much work to be done. There are many blockchain applications and start-ups in this field, but there are very few that are beyond the proof of concept or pilot study stage.
Speaking further on the significance of the seminar, the president of the Institute of Chartered Accountants of Nigeria (ICAN), Alhaji Razak Jaiyelo, said technology is vital in upgrading the accountancy profession. According to him, “It is imperative to deploy technology in tax assessment and collection system in Nigeria. With budget deficits characterising Nigeria’s fiscal management system in the last few years, experts and economic watchers have been in search of viable alternatives to reverse this not-too-encouraging development.”
The ICAN boss commended the efforts of the seminar committee for bringing all together, under the umbrella of SWAN to look at the highly important subject.
Jaiyelo, who was represented by Hajia Queensley Sofuratu Seghosime, also urged citizens to ensure they pay their taxes as it is very important to the development of a country. “Through taxation, the government will be able to provide the infrastructure, the education and other social welfares for the country. Even though the current administration which is driving the federal inland revenue service is doing a lot, they still need to do more to be able to get to everybody for them to know that it is with that money that development will come so some of the programme of SWAN is helping to reach out to schools and to universities because taxation is very key to development.”
There is also room for accountants to work as advisers to companies considering joining blockchains themselves, providing advice on weighing the costs and advantages of the new system. Accountants’ mix of business and financial knowledge would position them as key advisers to companies approaching these new technologies looking for opportunities.
To the chairperson of SWAN, Mrs Ijeoma Ugwunebo, the seminar was not just about women, but an evolving thing. “We have a lot of people talking about it but here we have professionals to talk to them in a language they will understand, the importance of blockchain technology, let them understand what it is all about so that they can make informed decisions when they hear about it. They can also authoritatively talk about it. We need to know whether our investment in that area is safe or not.” For the accountants, blockchain is here and it is only going to get bigger. The earlier you start understanding its uses, and start your learning by using it yourself so you can better understand it, the better off you will be as the rapid innovation starts taking hold. The fact that world’s bigger companies such as American Express Company, Bank of America, Agricultural Bank of China among others are testing a way to use blockchain to give vendors more power over membership rewards, calls for attention.