Study unit 11, AIN

• Society is becoming more dependent upon computer and communications technology
• Many would argue that we have left the industrial age behind, and the information age has taken over
• Blockchain


  A decentralised, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network
• Blockchain (alternative definition)


  A technology that allows people who do not know each other to trust a shared record of events
• Blockchain is used in cryptocurrency such as bitcoin
• In blockchain, transactions are basically publicly stored to form a shared ledger and verification
• Benefits of blockchain


  • Security
  • Cybersecurity is a key risk associated with the use of IT systems and the internet
  • Traditional systems have been "closed", and so modifications to data have been carried out by just one party
  • If the system is hacked, there is little control over such modification to prevent it from happening
• Features of a blockchain

  • Transactions are recorded by a number of participants using a network which operates via the internet
  • The same records are maintained by a number of different parties
  • As a transaction is entered, it is recorded by not just two parties, but instead by all of the parties that make up the overall chain
  • All the records in the blockchain are publicly available and distributed to everyone that is part of that network
  • When a transaction takes place, the details of that deal are recorded by everyone
  • The process of verifying the transaction is carried out by computers
  • The computers work together to ensure that each transaction is valid before it is added to the blockchain
  • A single system cannot add new blocks to the chain
  • When a new block is added to a blockchain, it is linked to the previous block using a cryptographic hash
  • It is intentionally difficult to alter past transactions in the blockchain because all the subsequent blocks must be altered first
  • If anyone should attempt to interfere with a transaction, it will be rejected by those network parties making up the blockchain whose role it is to verify the transaction
• Typical stages in a blockchain transaction

  1. Transaction is requested

  2. A block is created as digital representation of the transaction

  3. The block is sent to every node in the network (distributed ledger)

  4. The nodes validate the authenticity of the transaction

  5. The nodes receive a reward or the proof of work, such as bitcoin

  6. The completed authorised block is added to the chain
• Relevance of blockchain technology to finance professionals


  • Provides clarity over ownership of assets and existence of obligations
  • Can dramatically improve efficiency
  • Provides an unalterable, transparent record of all accountancy-related data
• How blockchain can enhance the accounting profession

  • Reducing the costs of maintaining and reconciling ledgers
  • Providing absolute certainty over the ownership and history of assets, the existence of obligations and the measurement of amounts owed to a business and owed by a business
  • Helping accountants gain clarity over available resources
  • Freeing up resources to concentrate on planning and valuation, rather than record-keeping
• Fourth Industrial Revolution (4IR)


  The advent of a "cyber-physical system" (CPS) involving entirely new capabilities of people and machines
• The 4IR represents revolutionary changes to everything and describes the phenomenon as it aptly applies to both the technical shift of Second Machine Age (2MA) and how people will live in it
• Features of the 4IR

  • Fusion - cyber and physical systems will continue to fuse, becoming increasingly autonomous
  • Employment - robotics, automation and digitisation are predicted to make many jobs redundant or fundamentally different to today
  • Artificial intelligence and machine learning - improved computing speed and optimised supply chains enable products to be customised more easily and more cheaply
  • Machine-led manufacturing - the shift from machines helping workers manufacture, to workers helping machines, will accelerate
  • Improved asset management - benefits to the natural world through more efficient use of natural assets, a shift to renewables, innovations in recycling, coupled with digitisation, are anticipated to benefit the natural world
• Top ten skills needed by employers by 2020

  • Complex problem-solving
  • Critical thinking
  • Creativity
  • People management
  • Coordinating with others
  • Emotional intelligence
  • Judgment and decision-making
  • Service orientation
  • Negotiation
  • Cognitive flexibility
• Active listening and quality control, which were the skills identified as needed in 2015, are no longer needed and were replaced by cognitive flexibility and emotional intelligence in 2020
• As work becomes automated, it will also become much more fluid, needing employees to be agile and able to jump between very different types of tasks and contexts
• Major areas of concern in the 4IR

  • Inequality - the richest 1% of the population now owns half of all household wealth
  • Security - increasing inequality creates security concerns for both citizens and states
  • Identity, voice and community - emerging technologies, particularly in the biological realm, are raising new questions about what it means to be human
• Role of higher education institutions in the era of 4IR

  • Today's higher education was designed to meet the needs of past industrial revolutions, with mass production powered by electricity. Those systems are not suited for the automation economy.
  • Today's learners of all ages are faced with major challenges in demographics, population (both growing and shrinking), global health, literacy inequality, climate change, nuclear proliferation and much more. Thus, as they leave university, the 4IR world makes significantly different demands on them than have previously existed.
• Today's HE was designed to meet the needs of past industrial revolutions, with mass production powered by electricity. Those systems are not suited for the automation economy.
• Today's learners of all ages are faced with major challenges in demographics, population (both growing and shrinking), global health, literacy inequality, climate change, nuclear proliferation and much more.
• The 4IR world makes significantly different demands on learners than have previously existed.
• Design, construction and verification of CPS

  • Pose a multitude of technological challenges
  • Must be addressed by a cross-disciplinary community of researchers and educators
• Information transfer is no longer the sole purview of institutions of higher education.
• Lifelong learning and upskilling

  Everyone is now responsible as the skills that will carry one through as the content will always be changing
• Learning must go way beyond information transfer to develop these skills.
• Although traditional undergraduate, graduate and research education will remain important to society, space must be created for adult learners to continue their learning as well.
• In collaboration with governments and industry, HE must prepare lifelong learners together.
• Whatever was promised before by completing an HE degree, is not promised any longer.
• Neither a high school or undergraduate education, nor a master's degree or a PHD is enough.
• Nearly everyone will work with AI; this means, what one majored in will not determine one's job or career. The content and a deep understanding of it matters, but it is also about what one can do with it.
• The information transferred through the traditional lecture and test format does not get the student up very high in cognitive capacity ranks of higher-order thinking.
• Education is a mechanism that must propose learning that serves to interact with the context that demands certain skills to be efficient.
• The change in HE has been considered inadequate, although some institutions are trying to adapt.
• Bloom's taxonomy of higher learning

  • Remembering
  • Understanding
  • Applying
  • Analysis
  • Evaluating
  • Creativity
• University systems are responsible for training the accounting professionals in the development of new skills of the new accountant and auditors.
• This requires the innovation and updates that respond to the 4IR, without neglecting the social and ethical responsibilities of anti-corruption.
• Accounting and data processing are intertwined, but the development of concepts that adequately reflect the changing situation is delayed.
• During the last two decades, institutions have focused on integrated internal data processing and receiving data from or transference to other institutions using communication infrastructure.
• Now, the focus is on uploading data – fixed paper documents – to computer media without using the keyboard, because this task requires a lot of staff time and diligence.