Blockchain or distributed ledger technologies (DLTs) could lead to disruption to financial reporting and auditing processes, Jeanette M. Franzel, Board Member of the Public Company Accounting Oversight Board (PCAOB), said recently.
Speaking at the 16th Annual Financial Reporting Conference in New York, Franzel noted that audit firms are using innovative technologies including data analytics and artificial intelligence to change the model of auditing. She said:
“Certain technologies, such as robotics, artificial intelligence, and distributed ledger technologies, also known as blockchain or distributed database technology, have the potential to disrupt markets and information sharing, which could also cause disruption to financial reporting and auditing processes.”
Franzel went on to say that while these technological changes have the potential to enhance the value of the audit process and increase audit quality, they will present challenges and threats across the auditing profession. This includes increased investments, new management and technical skills, as well as new firm business and organizational models.
Although Franzel refrained from disclosing any details on whether the PCAOB is exploring blockchain technology in particular, she said:
“We currently have a number of interdisciplinary initiatives underway at the PCAOB to study and evaluate the implications of new audit innovations and technologies on PCAOB auditing standards, inspections, and oversight generally, so that we will be well poised to meet these challenges as they arise.”
Established by the US Congress, the PCAOB is a nonprofit corporation that aims to protect investors and the public interest by promoting informative, accurate, and independent audit reports and to oversee the audits of public companies and broker-dealers.
