Thread by @MarufLawal

We see four problems with modern accounting. First, the current regime relies upon managers to swear that their books are in order. Dozens of high-profile cases—Enron, AIG, Lehman Brothers, WorldCom, Tyco, and Toshiba—show that management doesn’t always act with integrity ..

Greed too often gets the best of people. Cronyism, corruption, and false reporting precipitate bankruptcies, job losses, and market crashes, but also high costs of capital and tighter reins on equity.

Second, human error is a leading cause of accounting mistakes, according to AccountingWEB…. Often it starts with a day finger entering a wrong into the spreadsheet.. then a butterfly effect takes place and leads to big problem..

Third, new rules such as Sarbanes-Oxley have done little to curb accounting fraud. If anything, the growing complexity of companies, more multifaceted transactions, and the speed of modern commerce create new ways to hide wrongdoing.

Fourth, traditional accounting methods cannot reconcile new business models. Take microtransactions. Most audit software allows for two decimal places (i.e., one penny), useless for microtransactions of any kind.

Then comes distributed world wide ledger … what every accountant is scared of😀😀😀 where the ledger becomes instantly available to everyone who needs to see it

A World Wide Ledger and a transparent record of everything “means that a regulator would have access to the same base layer of data. That would mean less work, less cost, and banks could be held to account in near real time.

It bakes integrity into the system. “All fraud would be much harder. You have to do fraud on an ongoing basis and at no point can you go back and change your records.. nightmare for bankers and accountants 😀😀😀😀

A public ledger that is constantly audited and verified means you don’t have to trust the books of your partner; there is integrity in the statements or the transaction logs, because the network itself is verifying it ..

….It’s like a continuous a priori audit that is done cryptographically. You’re not relying on PricewaterhouseCoopers or Deloitte. There is no counterparty risk. If the ledger says this is true, then it’s true.