Analysis on the Application of Blockchain Technology in the Accounting Industry

Gao Xu

Abstract: Whether in the past or in the current information age, the accounting industry plays an important role in people's daily life and social employment. Accounting can be applied in all walks of life. Especially in the 21st century, it is a trend to make the accounting industry more standardized, scientific, and intelligent. The advent of blockchain technology has made the accounting industry more convenient and effective. Its application in distributed books has unique advantages. It helps the accounting industry to a higher level. Based on this situation, this article analyzes the application of blockchain technology in the accounting industry. After analysis, it hopes to provide some reference values.

Keywords: Blockchain Technology; Accounting Industry; Application Exploration

Generally speaking, the blockchain technology uses the time as the classification standard to press the effective data into blocks. This arrangement is a data chain that uses computer encryption algorithms to ensure the preservation of the data. The data are not tampered with, and a real and effective data ledger is obtained. The application of this technology in the accounting industry can record valid data to ensure its authenticity. The data ledger is also transparent and clean. The accounting field in enterprises must ensure the authenticity of data, counterfeiting is the most taboo. The application of blockchain technology can perfectly avoid this and effectively solve the defects in traditional accounting models, thereby ensuring financial security and efficiency.

1 the importance of blockchain in the accounting industry

(1)Ensure the authenticity of data information

In China's traditional accounting work model, centralized accounting is basically implemented. One person can complete all parts of the entire process. Therefore, in many enterprises, there is a phenomenon of false accounting in financial aspects, which are resolutely infeasible for an enterprise. To get rid of this situation, the application of blockchain technology in accounting can solve this problem. Because in the blockchain technology, accounting is not done by the same person, but it is cooperated by many different persons. The accounting work is divided into various  nodes. At the end of each node, there is an identical distributed ledger. Nobody can change this. So the authenticity of the data is guaranteed, and the accounting data are transparent.  Companies can share data so that the information is no longer isolated.

(2) Reduce business transaction costs

An enterprise's investment in accounting is a huge and indispensable part. Only effective accounting can make the enterprise run healthier. Nevertheless, huge expenses are burdens for some enterprises. It would be a win-win situation if enterprises could reduce capital investment in this while ensuring the effectiveness of accounting. The emergence and application of blockchain technology can fix

this. First, the most prominent distributed ledger in blockchain technology can realize the transparency of accounting data. So anyone can see the authenticity of the data. When companies have to establish financial connection, they dont need to hire auditors to check the authenticity of the ledger information. This will greatly save audit costs. At the same time, no third party is required in the transaction process. In the past model, authoritative institutions were needed to enhance the authenticity of data. The detrust feature of blockchain can reduce unnecessary expenditures. This is meaningful for some small and medium enterprises.

(3) Improve accounting efficiency

In China's traditional accounting work model, the related matters are all processed in a centralized manner, and the reconciliation and settlement are performed manually. This kind of work is very inefficient, not only wasting a lot of time and manpower, but also prone to errors. Especially at the end of the holiday season, the workload of financial staff is greater. So it is meaningful to improve the efficiency of the accounting staff. In blockchain bookkeeping, the system can automatically check and verify related jobs. Because the distributed ledger is divided into nodes according to time. Checking systems randomly is convenient and efficient. Real-time reconciliation can be achieved to ensure uninterrupted within 24 hours. Blockchain is also transparent in recording the data after the end of a node. In this way, the entry and modification of transaction data will be recorded by any part. Therefore, parties of transactions can grasp the latest information in time when conducting transactions. It will ensure that the financial staff promptly knows the information.

2 Challenges of blockchain application in the accounting industry

(1)Industry standards have not yet been established, and relevant laws are still blank.

Although blockchain technology has been applied in some enterprises accounting part in China, it is still incomplete as a whole. Relevant laws and regulations have not yet been established. Many accountants work at the base of their knowledge and personal experience. So the blockchain does not have standardized. The mature application of any technology requires a unified industry standard. Even though China has a comparatively complete accounting system, the worldwide standards havent been confluent. This status makes any enterprise dare not to be a leader. No rules, no standards. Nowadays, blockchain technology is in a legal blank. This will be very dangerous if the blockchain has problems in trade settlement. Those potential problems may cause difficulties.

(2) Blockchain urgently needs a large number of senior talents to enhance core competitiveness.

The application of blockchain technology in the accounting industry has a bright future, but it is lack of senior talents. The shortage of talents is difficult for enterprises to enhance the competitiveness. The blockchain technology requires high-level computer professionals. It means basic computer knowledge is not enough. Well, undergraduates major in computer are trained basically. R & D personnels need to have research and development capabilities. Thus, the blockchain needs training plans for talents to overcome the bottleneck.

Conclusion remarks：

No matter when and where, accounting is closely related in many industries and people's daily life. In the era of big data centered on the Internet, changes of accounting industry are even more obvious. Accounting industry is facing many challenges. Only by keeping up with the time can we ensure the sustainability of the industry. However, China's traditional accounting model is relatively behindhand. The existed model reduces the work efficiency and makes false accounts happen from time to time. The application of blockchain technology in accounting will completely solve this problem. On the one hand, it improves work efficiency, on the other hand it ensures the authenticity of data and brings better vitality to the accounting industry.

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