Experts believe that Blockchain will have a positive impact on a variety of industries, including social media, real estate and banking. Contract audits are also included, with a number of benefits that may be realized during the process when this technology is adopted.
Blockchains are designed to resist modification of the data which is stored. Functionally speaking, the Blockchain may serve in a ledger that is distributed and open which may record transactions among parties in a manner that is permanent, verifiable and efficient. Additionally, it can be utilized as a verification source for any transaction which is reported.
For instance, bank customers are sometimes required to provide their bank statements, and an auditor can confirm the transaction through a Blockchain ledger. Because the process is automated however, it will create cost efficiencies. Furthermore, the days of substantive testing which is sample based will become passé, since auditors can utilize Blockchains for the purpose of testing an entire collection of transactions within a short time span. This greater coverage will enhance the assurance level which is provided in audit engagements.
In current Blockchains, a low value transaction takes about ten minutes for validation since a single block system for verification is most appropriate. As more blocks begin elapsing prior to the transaction being designated as verified, the longer the change, and the more that transactions which are related to it are immutable. Transactions which are of high value will typically take about 60 minutes for verification, which is about six blocks. Compare this to standard banking transaction where data might require as long as a month for clearance.
As far as auditing is concerned, rather than assessments being performed at the end of the year, auditing firms can be positioned to carry out continuous assessments online for the duration of the audit period. The ultimate goal of Blockchain technology is audits which are completely automated. Common financial statement assessment processes such as accuracy, occurrence, and information completeness are the main candidates for automation and will provide many benefits in terms of timing.
Blockchains are a natural fit for audits because they are a type of ledger which is distributed. This means they comprise the details of each transaction which are relevant and combined with their authenticity and validity the transactions are provided via cryptography. Since Blockchains do not require a central administration system this means the transactions can be processed by practically anyone utilizing computational power that comes from hardware which is specialized.
Due to the global internet expansion which has occurred over the last 25 years, society has rapidly transitioned into a world that is digital. Blockchain is the next step in this revolution and we are at the forefront. Our Blockchains are highly secure and simple to use, which makes them the ideal solution for contract audits as well as many other tasks. The efficiency that you will achieve via audit automation will be combined with new procedures that will maximize assurance. Contact us to learn more.