Blockchain can transform financial and audit reports, improve integrity, increase efficiency and reduce costs, according to a study by the University of Maryland (UMD).
“Many audit companies want to use the blockchain and they want to apply technology. I wanted to build a use case for the blockchain working for audit companies, “said Sean Cao, an associate professor at the Smith School of Business of the UMD, who led the research.
Entitled “The distributed registers and the secure multipartite calculation for financial reports and audit”, research was published in Management Science. It took CAD and his team six years to explain how blockchain can disrupt traditional audit methods, which makes them more transparent and effective.
The audit is based on a “impartial financial report” and the report notes that listeners and regulators have sought new ways to improve the integrity of reports for decades. Despite the digitization of the industry, it always takes massive time to verify transactions, especially when the transaction partners hesitate to share data due to confidentiality problems.
“It is with a high intensity of labor and you cannot check all the receipts. You must make a random sample. But there would be mistakes because it is really random, ”noted Cao.
Blockchain can transform this process, checking effectively and profitable transactions, the report indicates. Unlike other centralized solutions, the efficiency of blockchain does not sacrifice data security and confidentiality, which is essential in the financial world. CAO estimates that the integration of the blockchain could cause cost reductions of up to 70%.
The report recognized that the integration of the blockchain has gaps, noting: “The only thing it cannot replace is when a transaction requires discretion.”
However, BSV offers improved confidentiality via its superposition networks, which operate on the network of BSV nodes. Private overlays built at the top of the BOSV blockchain can provide limited and / or authorized access to specific individuals or entities while taking advantage of the decentralized network for impenetrable security.
In a previous report, the Deloitte audit giant noted that continuous online audits are on the horizon with the integration of blockchain into the audit process.
“Deloitte plans that, at the end of the blockchain road, fully automated audits can be a reality,” he said.
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