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Blockchain technology: ICAI to adopt use of blockchain tech in auditing

Blockchain technology has applications in a lot more areas, such as real estate (digital land records that cannot be modified without consent), and intellectual property rights (authenticating ownership and the transfer of these rights), among others.Premium
Blockchain technology has applications in a lot more areas, such as real estate (digital land records that cannot be modified without consent), and intellectual property rights (authenticating ownership and the transfer of these rights), among others.

  • Technology will be a major focus at the Institute of Chartered Accountants of India as it not only disrupts but will also creates opportunities,  ICAI said

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Considered to be one of the safest and most secure information-recording and financial transaction mechanisms today, blockchain technology will now become part of the Institute of Chartered Accountants of India (ICAI). The Chartered accountants' apex body ICAI has announced its decision to explore the use of blockchain technology in auditing.

"Artificial intelligence and blockchain technology will be the focus among the emerging technologies. We will explore how blockchain can be used in auditing," new president Debashis Mitra told PTI.

Technology will be a major focus of the Institute of Chartered Accountants of India (ICAI) as it not only disrupts but will also creates opportunities, Mitra said.

Blockchain technology is the concept behind the running of the blockchain – a blockchain is an unchangeable, distributed digital ledger. The transactions or records on the ledger which are stored individually is referred to as a “block" and the information in a block is usually linked to the information in a previous block. This, over time, forms a chain of transactions, which is what the word blockchain refers to.

Mitra said the ICAI's decision to mandate a peer review mechanism for certain categories of firms rendering assurance services to specific classes of entities will go a long way in enhancing the audit quality.

The implementation will begin in a phased manner from April 1 with practice units that have undertaken a statutory audit of enterprises, having equity or debt securities listed in India. Over the next three years, the rollout would steadily cover firms providing assurance services to unlisted companies.

Additionally, Mitra has said the institute's recently-launched Audit Quality Maturity Model – Version 1.0 (AQMM v1.0) will help sole proprietors and audit firms to self-evaluate their current level of audit maturity, identify areas where competencies are lacking and develop a roadmap for achieving a higher level of maturity.

"ICAI is committed to being a partner in achieving the UN Sustainable Development Goals (SDGs) 2030 Agenda and strengthen the sustainability reporting ecosystem in the country," he said.

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