Blockchain in the Accounting Curriculum

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Blockchain is considered one of the most significant advances in record keeping since double-entry bookkeeping emerged in Italy in the 15th century. There may be differing opinions on the rate of adoption, but the view is widespread that blockchain has the potential to dramatically change the way business will be conducted. It is imperative that accounting educators expose students to this technology. This column offers strategies for introducing blockchain content into the accounting curriculum and helping ensure accounting education remains current for future CPAs.

What Is Blockchain?

A generally accepted definition of blockchain remains elusive, but typical characteristics include the following:

• A distributed database, meaning each party on the blockchain has access to the entire database and can verify all transactions without an intermediary

• Peer-to-peer transmission without the need for a central authority

• Complete transparency for all that are authorized to participate in the blockchain

• Permanent, immutable, and time-stamped transactions

• Computational logic, meaning transactions can be programmed using algorithms and rules that automatically generate transactions1

In simple terms, blockchain can be thought of as a shared database in real time that is continuously reconciled and all transactions are known by all authorized participants.

Often associated with the enabling infrastructure for cryptocurrencies such as bitcoin, blockchain can be used in a variety of industries, including banking, supply chain management, health care, and government. Blockchain can be used to store transaction data for anything of value, including titles, deeds, images, music, intellectual property, patient records, and even votes.2

Blockchain in the Curriculum

Blockchain concepts could be introduced in a variety of undergraduate and graduate accounting classes, including financial accounting, auditing, tax, and accounting information systems. Perhaps the simplest method for introducing blockchain is to assign an article on blockchain and then discuss as a class. Students in my graduate enterprise systems and information technology controls class had a robust online discussion after reading an assigned article on blockchain.

How blockchain solved the double-spending problem with digital currency would be an appropriate topic for a financial accounting class when covering double-entry accounting. Since blockchain has the ability to provide an immutable audit trail, examining its impact on the audit profession would fit well in an auditing class. In a federal taxation class, exploring the effect blockchain may have on transfer pricing would be relevant.
Or you may consider a research project on blockchain in an accounting information systems course that would allow students to explore an organization’s entire information system.

Demonstrating how blockchain works is another way to expose students to the technology. Anders Brownworth, a cryptocurrency expert and former blockchain lecturer at the Massachusetts Institute of Technology, created a site (anders.com/blockchain/blockchain.html) to visually demonstrate how blockchain works. Students can see the security features in action and the process of mining (solving math problems using a cryptographic hash function).

Blockchain Training for Faculty

Faculty who gain expertise in blockchain will be able to go beyond “raising awareness” efforts. Sean Stein Smith, an assistant professor at Lehman College in New York, suggests accounting departments ask for faculty volunteers to act as early adopters.3 Course releases and stipends could serve as an effective incentive. After becoming experts, faculty can integrate blockchain projects and case studies into existing courses, or even develop a stand-alone special topics course.

The AICPA has an online certificate program titled “Blockchain and Beyond.” It will be available through the PICPA this spring, and provides about 15 hours of content focused on the concepts underlying blockchain technology and crypto-currencies, the risks and challenges of implementing blockchain, and exposure to digital ledgers and smart contracts. The Big 4 firms also offer a variety of online resources.

There are several reputable online resources available too, such as Coursera’s IBM Blockchain Foundation for Developers course, Edureka’s Blockchain Certification Training, and Udemy’s Basics of Blockchain, Ethereum, Bitcoin, and more. Other providers include Lynda.com, Khan Academy, Skillshare, Udacity, and Microsoft Virtual Academy. Several books have also been published on the technology.

Conclusion

Blockchain has the potential to revolutionize business processes and accounting practice. Educators cannot be left behind. Effectively introducing blockchain into the curriculum will ensure that accounting education maintains relevancy and prepares students for the future.  

1 Marco Iansiti and Karim R. Lakhani, “The Truth about Blockchain,” Harvard Business Review (January-February 2017).
2 For an in-depth review of the potential implications of blockchain for CPAs, see “Blockchain and the Future of Accounting” by J.L. “John” Alarcon and Cory Ng in the winter 2018 edition of the Pennsylvania CPA Journal.
3 Sean Stein Smith, “Integrating Blockchain and Artificial Intelligence into the Accounting Curriculum,” Journal of Accountancy (Nov. 14, 2017).

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Cory Ng, CPA, CGMA, DBA, is an assistant professor of instruction in accounting at the Fox School of Business at Temple University in Philadelphia and a member of the Pennsylvania CPA Journal Editorial Board. He can be reached at cory.ng@temple.edu.