BLOCKCHAIN

ACCOUNTING
SUBMITTED TO – DR. SUKHWINDER
ARORA
SUBMITTED BY – PRIKSHIT AND
MANISH
 INTRODUCTION

• Needless to say, Blockchain is an accounting innovation that broadly

looks into the exchange of money related data and the ownership of
assets. Blockchain maintains a ledger of every transaction taking
place in business be it the financial information or the asset transfer
information.
• The distributed ledger technology indeed keeps the potential to
enhance the accounting profession via bringing down the
maintenance costs of ledger, keeping the transaction histories intact,
also providing absolute certainty over ownership of assets.
EVOLUTION OF ACCOUNTING
SYSTEM

History of Accounting:
Single Entry accounting System.
Double Entry accounting System.
Triple Entry accounting System
or Blockchain Accounting.
 DOUBLE ENTRY-ACCOUNTING
SYSTEM
In double entry accounting system every transaction have two
accounts.

Example- borrow loan 1000 from bank.

Assets Liability
Cash-1000 Loan payable -1000
 SHORTCOMINGS IN DOUBLE
ENTRY ACCOUNTING SYSTEM

A- SEPARATE SET OF BOOKS NO ONE ACCESS TO EACH OTHER

RECORD.
B- LACK OF TRANSPARENCY.
C- POSSIBILITY OF ERRORS OR FRAUD.

X Y
Y a/c dr. 1000 Bank a/c dr .1000
to bank 1000 to x a/c 1000

or
 or

Y a/c dr.1000 Bank a/c dr. 100

To bank 1000 To x a/c 100

Our centralise
trust on
Auditors
auditors to
play the key
role as
We invest in the watchdogs.
Credit rating agency
companies

Regularity authority
WE TRUST AUDITOR IF
AUDITOR IS CORRUPT THAN

KPMG and Deloitte aided the IFIN to do fraud of 99000

crore.
Financial crisis 2008.
Satyam colluded with PWC for 8800 crore.
Enron scandal.
Tyco scandal.
TRIPLE-ENTRY ACCOUNTING
SYSTEM
It is the common thread that binds the accounting, auditing, and
blockchain.
It would not change the existing accounting norms of bookkeeping.

Ex-
ADVANTAGE
S
• It is a Decentralized System.
• It takes the dependency out from the auditors to
ensure consistency.
• It establishes a self regulated and shared
environment amongst all stakeholders.
• It is tamper proof, it brings around trust into the
books.
• Faster and Cost-Effective.
• Immutable and cannot alter the data.
• Everybody will have access to the data.
DISADVANTAG
ES
• Complexity.
• Some Blockchain Solutions Consume to much Energy.
U
n
c

• Reconciliation Jobs can also eliminated.

e
r
t
a

• Data is Immutable. i
n Power
Costuse
r
• Human Error. e
g
u
l
a
t
CONCLUSIO
N

• Blockchain represents a opportunity, not a threat, with future

accounting and auditing services likely to include some
consideration of blockchain.
• Some Skepticism is warranted regarding potential benefits and ease
of implementation.
• The benefits are likely being oversold, while the costs and
difficulty of implementation are likely being undersold.