American Institute of Certified Public Accountants (AICPA) Issues New Blockchain Data Laws ‘SAS’
Blockchain is taking over the world and this is evidenced by the number of mainstream institutions that are making provisions for blockchain and blockchain related products such as crypto being accepted as a means of payment by various mainstream merchants and blockchain being applied in various facets of life from supply chain to food management.
A new development has come up in that regard as the American Institute of certified public accountants has put forward a new set of possible laws which act as standards for the auditing of evidence and this includes provision for blockchain-based data. This is according to a trade publication who published the report on June 24, 2019, regarding the matter.
Accounting For Blockchain
The new proposal is called the proposed statement on auditing standards and will set guidelines for how auditors and preparers should evaluate audit evidence with regards to new and emerging technologies which includes data analytics and blockchain among others.
Even though the data in question will be based on various sources, the new standards are source-indifferent but multi-dimensional in the evaluation of data. However, the end goal of these new standards is to help determine whether or not certain information that has been received based on these new technologies is sufficient enough to be considered audit evidence. This new development is not surprising as last week the AICPA Chief auditor Robert Dohrer made statements about the need to accommodate new sources of audit data.
“Given the rapid evolution of audit evidence sources that are available today, it is critically important that auditors have a robust, durable set of attributes that allows them to make consistent assessments about the sufficiency and appropriateness of audit evidence obtained,”
Truly this shows that the prevalence of data that is coming from various sources as they cannot be ignored anymore due to their prominence and as such, definite laws and provisions need to be made for them as we move into the future. Should these sources of data not be adequately provided for it could create a situation in which auditors and other accounting professionals unable to properly handle and access data that is coming from those sources.
This is especially true for blockchain as it is heavily being used for the management of cash flows and other financial information because of its irrevocable nature and the accuracy of its recordings. As blockchain and these other technologies become a major part of the financial world there will be a need for laws and regulations to manage the information coming from them so that they may transition easily with traditional accounting standards.
The statement by Robert Dohrer is also important as it shows that even major institutions like this accounting body are aware of the changes going on within the text base many of which have been brought on by emerging technologies such as AI and blockchain and aware that they need to move with the times.
This has been a consistent theme across the world as various bodies have begun making provisions for blockchain altogether or at least attempting to explore the space.