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We retain the double entry system, originally derived to handle a number system that did not have a zer0 cypher, because it is/should-be intrinsically self-balancing - lack thereof being prima facie evidence of error, and all this in spite of having had the zero since the 1340's.
With 'manually' held books, now derided by HMRC et alia, audit control points were also intrinsically built in.
The advent of electronic book-keeping rendered such audit-control point techniques almost impossible, and to try to mitigate this systems such as CObIT by ISACA were developed.
These depend utterly on the understanding of the cause/effect logic of the financial systems - and as such are the only real protection/mitigation processes under SOx and its various equivalents.
The inability to be sure that we will be able to follow the cause/effect trail must surely run counter to all 'auditability' logic and therefore, in a sense, be pulling the rug from under our feet?
Perhaps you should amend your article to "whether HMRC should understand the process or just trust the answers". Accountants never "just trust". We always have an inkling of what the figures should look like.
I am having a good day, working off my stresses through AccountingWeb.
Mt father taught me the correct way to use a hammer and chisel. I took lessons for learning how to drive a car. I use "Tech". It is not a question of trust. The use thereof is part of my professional life. I need to know just sufficient so as not kill myself or my clients(Metaphorically or physically) and to get the result I want. There are not enough hours in the day for anything else.
Trust the cloud? Trust software vendors?
NO WAY!
Not while my client, a vendor of u/£1000 motor vehicles, would be too ashamed to use their outrageous terms and conditions. Which would in any case be illegal if applied to the sale of "Old bangers".
Most of software Terms & Conditions may be summarised as
"If you use our software you are on your own.
We the vendors take responsibility for nuffin.
Also, we can do what we like, when we like, how we like, with the product. Including termination without notice"
Enjoyed both this article and the one linked, which raised Freddie Faure's concerns. Blockchain has potential here. Anything less is opaque. The problem for accountants, or indeed any professional that relies on blackbox type systems, is that you can't really trust a closed system to be right. You can hope it is, based on being well tested, and subsequently well used - to catch the bad tests.
Accounts, Audit & Tax software whether, in the cloud, supplied on CD-ROM (like in the old days), or even your basic Casio type calculator, which of course runs a firmware. None of them are under our control.
Bring back the Abacus. Not :)
Always do a sense check just as we teach 10 year olds by all means to use their calculator to get their answer buf it it produced 10x 10 is 10,000 then when they double check in their head they will realise it can't be right and they must have put the wrong digit in or the calculator is broken.
There will be little contractual come-back against software/blockchain providers as already mentioned in the comments.
Accountants using this do not worry me. It is HMRC forcing software products it has not itself produced and warranted on tax payers which products may not be particularly good (thinking of being forced into digital VAT myself at the moment)...