The National Institute of Public Accountants released a news bulletin on distributed ledger technology. The organization considers them emerging technologies that must undergo assessment in the future.
The National Institute of Public Accountants (INCP) of Colombia recently published a new bulletin that makes reference to cryptocurrencies and the distributed ledger technology (DLT) that supports them. The union described decentralized ledgers as an emerging technology that should undergo evaluation in the future in terms of their multifunctionality.
In the document titled “Guide to the internal audit of blockchain”, the organization explained the basic principles of DLT operation, consensus mechanisms, P2P networks, smart contracts, and their possible applications. The institute echoed analyses that consulting agencies Deloitte and KPMG have previously conducted.
It is important to note that this is the second newsletter related to cryptocurrencies and blockchain technology that the institute has released in three months. The previous one was Bulletin 158, which said institute published on December 30th of last year.
Regarding blockchain, the report stated that this emerging technology will continue to undergo assessment regarding its multifunctionality since organizations will make use of in very varied manners. The text explained that, for this reason, the level of preparedness of each internal audit function to respond to the risks posed will also vary. However, it made it clear that the focus and challenge for internal audit departments will continue to be the ability to anticipate and communicate the risks and opportunities that come with technological advancements.
In relation to cryptocurrencies, the Colombian union stated that they are the next link in the chain as they are a phenomenon that the revolution of payment systems has driven, due to the increasing penetration of the Internet.
According to KPMG, the institute considers that blockchain “fits like a glove” as it is a sequentially ordered transactional record, with the only possibility of adding records. This technology does not provide the option to modify or delete them, which translates into a potential to create new payment systems on a global scale through the Internet.
The bulletin highlighted that countries worldwide need to consider how payment systems are going beyond the traditional control mechanisms of monetary authorities. It also mentioned Facebook’s announcement to launch its own cryptocurrency, Libra.
In the past, authorities or institutions from various countries have addressed aspects such as the supervision of cryptocurrencies and their accounting records, as has happened in Spain and Venezuela. In the case of the European country, there is already legislation that requires users to declare the ownership of cryptocurrencies such as Bitcoin.
In Venezuela, the Federation of Colleges of Public Accountants recently approved a bulletin that lays the foundations for how cryptocurrency owners must declare their holdings and how accountants must establish them in accounting records. Even though the position on cryptocurrencies and blockchain technology in Colombia is more closed, the fact that INCP highlights their potential applications sends a signal that there are organizations more open to potential adopters.
By Alexander Salazar
