Technologies like blockchain are changing the face of auditing, according to a senior official of an oversight board created by the US Congress.
Speaking during an investor event in New York last week, Jeanette Franzel, a board member for the Public Company Accounting Oversight Board (PCAOB), said she believes distributed ledgers could bring both opportunities and problems for auditors, should financial firms adopt the tech in a significant way.
Franzel remarked:
“These potentially disruptive changes will present challenges and threats across the auditing profession, including the need for significant investments in technology, new management and technical skills, and even new firm business and organizational models. Of course, these developments will present new corresponding risks to audit quality.”
Notably, Franzel isn’t alone in this view.
FINRA, the self-regulatory agency for the brokerage industry (over which the PCAOB has authority), said in a report issued in January that blockchain could both reshape the work its members do as well as the standards it develops.
The ACCA, the world’s biggest organization for certified accountants, too, has argued that the tech is redrawing the financial reporting landscape.
Such technological shifts are likely to impact not just the industry it oversees, but the PCAOB itself, according to Franzel.
“The PCAOB’s inspection approaches have been evolving and changing over the years in response to risks and trends, and the pace of these changes and the necessary evolution in our inspection approaches will likely accelerate drastically in the coming years,” she said.
Established in 2002 with the Sarbanes-Oxley Act, the PCAOB aims to improve auditing standards and corporate disclosures. As part of that legislation, the PCAOB was set up as a non-profit entity devoted to policing auditors based in the US.
Auditing image via Shutterstock