CAT / FIA FBT Syllabus C. Accounting And Reporting Systems, Controls - Blockchain - Notes ^{4 / 5}

This is a technology that eliminates the need for data to be stored and managed centrally.

It allows an accurate, up-to-date, single, trusted and transparent record to be shared between numerous organisations.

EXAMPLE

Bitcoins are created by individuals or organisations processing data and solving problems (known as mining).

Once mined, Bitcoins become the property of the miner and can be traded or transferred.

Every transaction is recorded on a Blockchain.

The Blockchain stores the transaction history of all Bitcoins, enabling the assurance that only legitimate owners of Bitcoins can spend or transfer them.

For Accountants and Auditors

Distributed ledgers and Blockchains allow for increased clarity and transparency in the recording of business transactions.

This is because transactions can also be posted to a public ledger on a Blockchain.

This extra information means that there are more resources available for business planning and valuation, especially in regards to measuring the value of assets

Distributed ledgers also reduce the need for auditors to audit transactions and verify the ownership of assets because they have a source of information about the assets that they can trust.