Barden Insights | Blockchain: Enabling a Smarter Audit
There’s no doubt that the emergence of Blockchain has been an exciting and innovative development in technology, and is shaping a new and efficient way in which the financial services industry is transacting.
Barden caught up with Will Rogers; a Financial Services Senior in a Big 4 firm, and a self-confessed FinTech nerd (!) to discuss how an audit platform based on Blockchain technology can be used to improve organisational agility, which is at the heart of digital transformation.
Data analytics tools are already a customary part of the auditing process, enabling deeper data insights. Further to analytical developments professional services firms are now investing heavily in Blockchain technology to ensure they are in prime position to offer forward-looking assurance services, in line with increasing industry demands. Regulators have responded positively to the technology, Will explains “The FCA openly backed the use of Blockchain technology this year in relation to the transfer agency function of UCITS, showing support and commitment to improving the investor experience”. This highlights the pressing requirements of firms to take advantage, taking a holistic approach to technology to maximise its benefits.
But how will this work?
One of the most exciting developments in the financial services industry to date is the use of smart contracts, such as Corda (read more here). This signifies a move towards technologies based on a decentralised system, whereby an exchange takes place without the use of an intermediary. This impacts businesses in an unprecedented way, and offers a new scope of potential services not limited to the financial services industry. Will believes with reduced necessity for intermediaries, information will become available almost instantly. “Real time auditing is a future possibility offering insights into our client’s financial information instantly, a process that currently takes a significant investment of time”.
Smarter auditing will bring a myriad of benefits to the audit process, and to clients. “The overall quality and efficiency of the audit will be significantly improved, allowing auditors to focus on the important tasks at hand”. Not only that, but costs for the client can be expected to decline, as less man-hours are required due to automation of the many tedious tasks of an auditor.
So does this mean that the role of an Auditor will be defunct; replaced by robots!?
Will responds “Absolutely not. Technologies like Blockchain should be used in unison. Blockchain can be one of the technologies that will strengthen the bridge between our commitment to digital transformation and the service we bring to our clients”. Auditors won’t be bogged down in digging through historical data, or spend valuable hours analysing and verifying it; the focus will be shifted to providing industry insights, technology expertise, and working with clients to improve their internal controls.
The role of the Auditor will encompass far more than accounting knowledge. Graduates looking to start their career in audit will benefit from being competent in data analytics tools, VBA and Excel. “This is an incredibly exciting time to be an auditor. Graduates from all backgrounds can look forward to being able to blend their skills and interests into an audit service of the future”.
Blockchain has certainly become an integral part of conversations in many boardrooms. Auditing firms who understand, embrace and adapt this progressive technology will undoubtedly gain a competitive edge in the market.
To learn more about Practice & Consulting opportunities, or to take part in our Barden Insights series, contact Heather Gordon (firstname.lastname@example.org).
At Barden we invest our resources to bring you the very best insights on all things to do with your professional future. Got a topic you would like us to research? Got an insight you would like us to share with our audience? Drop us a note to email@example.com and we will take it from there!