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  • Deloitte is helping more of its clients leverage blockchain technology. That’s because it sees the distributed ledger technology gain increasing usage after years of experimentation with the technology.

    “We were in an ideation phase with blockchain, which was a really long phase,” said Amy Steele, a partner at Deloitte. “Now we’re seeing a pivot, with more companies moving to the implementation phase, which is also going to be a lengthy phase. But as companies start to implement this more, we’re seeing a pivot from companies that are more emerging disruptor companies to larger enterprises that are using blockchain for business purposes. We are definitely seeing that shift.”

    Deloitte released a report last month based on a survey of 1,488 senior executives and practitioners in 14 countries and territories. It indicated that 88 percent of them believe blockchain will eventually achieve mainstream adoption, up from 86 percent last year and 84 percent in 2018. Thirty-nine percent of the respondents said they have already incorporated blockchain into production, up from 23 percent last year. Fifty-five percent of the respondents see blockchain as a top strategic priority. It was 53 percent in 2019 and 43 percent in 2018.

    “We see this as almost an inflection point,” said Brian Hansen, the U.S. audit at Deloitte. “We’ve seen a big movement within the whole ecosystem. It’s going to have significant impacts for auditors and accountants. They need to understand how they’re going to handle all the unique risks and auditability issues.”

    Deloitte conducted the survey before the novel coronavirus pandemic hit. “Since then, we have seen what’s happened with COVID is that things continue to support the survey results,” said Hansen. “Blockchain is one of those really important things that we’ve seen organizations accelerating as they think about digital transformation to move forward and implement this.”

    Blockchain may help biotech and healthcare supply companies keep better track of their supply chains and provide much-needed medications and personal protective equipment. These are running dangerously low at hospitals around the country or turn out to be defective or of dubious provenance.

    “With blockchain, one of the big selling points is that it can increase efficiency and reduce the costs of doing business,” said Steele. “I think that has been an area of focus in this COVID world: how do we do things better. Blockchain is potentially a solution in a number of areas.to do that. We’ve seen a heightened focus on how blockchain can solve the business challenges. I think that will continue in the post-COVID world, where we’re trying to innovate and do things smarter, better, faster.”

    The CAQ has also been working on helping auditors understand the technology. “From a Center for Audit Quality perspective, we have the Emerging Technologies Task Force. It is really looking profession-wide at how emerging technology is impacting professionals, in the tools that we use as an auditor to perform audits. They’re thinking through AI, robotics and machine learning. What are some tools that we can use to take big data, synthesize that data and perform higher-quality audits? And from a client perspective, it’s thinking through the different technologies that our clients are using, and how that impacts audit.

    It dovetails quite well with the AICPA. The CAQ is not creating guidance, per se. It’s more about helping the profession think through it. The AICPA is really tasked with, ‘We know these challenges related to blockchain and digital assets. We know it’s an incredibly hard area to audit and account for. How do we inform professionals and management to operate appropriately in this area?’”

    Some initial guidance last December from the AICPA dealt with the classification and measurement of digital assets. Last week’s guidance added audit content focusing on client acceptance and continuance at firms like Deloitte.

    “It’s really thinking through the unique risks and skills that you need before you take on a client,” said Steele. “We do very robust client acceptance and continuance work to understand the companies that we may potentially engage with.

     

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