This weekend I had a conversation with a brand new Accounting PhD graduate who made a statement something like,
"What is going on in accounting right now is a once in 500 year change."
I would completely agree. In fact, I did not quite understand the comment when it was made back in 2001; but John Covaleski, a senior editor of Accounting Today, said,
"...XBRL is perhaps the most revolutionary change in financial reporting since the first general ledger." (Accounting Today, September 4-24, 2000, page 22)
This Forbes article, Triple-Entry Accounting and Blockchain: a Common Misconception, makes the following statement:
"blockchain will entirely disrupt accounting processes as we know them -- it’s only a matter of time"
The global consultancy firm Gartner classified XBRL as a transformational technology in 2010. Gartner defines transformational as something that "enables new ways of doing business across industries that will result in major shifts in industry dynamics. Major shifts mean lots of change and some winners and some losers.
Big, big changes. This change will likely unfold over the next 30 years or so. That is not as long as people might think. Accounting is somewhere between 7,000 and 10,000 years old. And the change did not start 20 years ago when XBRL appeared. Many things are working together to enable this change. In my view, there will be a burst of significant change relatively soon.
Within accounting I include accounting, reporting, auditing, and analysis. This includes financial accounting, management accounting, and tax accounting. The biggest things impacting this change in my view are: (in no particular order)
Machine-readable XBRL-based financial reports are here and supplement the previous version which was only readable by humans. It will be interesting to watch other changes unfold. If you thought the change between paper spreadsheets and electronic spreadsheets was big; this move to modern accounting will be even bigger.
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