Financial Reporting System For Enabling Trusted Accounting Using Blockchain

Abstract

Traditional financial reporting is restricted to software solutions like ERP Finance, which call for manually recording the value of the business transactions in their own systems of Information technology. It is fraught with shortcomings like human errors/oversights (due to manual feeding of transactional data) and fraud (as there is no way to authenticate the transactions and/or their true value). To counter these limitations, we need to reimagine the way a company’s financial transactions get recorded and classified. We propose a solution that would maintain a company’s financial data, while increasing trustworthiness and transparency of the system. This is done by way of integrating Cloud, Big Data and Blockchain technologies, and provide a trusted access to all its stakeholders. A blockchain, kept on Hybrid cloud infrastructure, records accounting transactions between two companies serves as the single source of truth for both the companies, thus eliminating chances of fraud. The article explores the InterWork alliance, which standardizes blockchain code for business transactions. It also explores how it can be linked to Government blockchains to make the tokens (blocks) as indelible and trustworthy. Red Hat Cloud helps pull data to build reports like Profit and Loss and Balance Sheet while extracting data from blocks kept on multiple servers and in different geographies. Meaning can be given to these financial transactions through Big data. This article explores how to bring together these concepts to build an implementable Financial Accounting solution.