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Blockchain: the future of accounting?

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Valuation of cryptocurrencies has fluctuated in recent months, drawing interest from every type of investor. While the markets remain volatile and uncertain, we here at REM believe that blockchain technology will play a significant role in the future of accounting. The concepts we first introduced in Blockchain 101 are here again in an infographic provided by the Bachelors of Science in Accounting Program at Maryville University Online, which demonstrates how blockchain can and will change some of the fundamentals of the accounting profession. We have taken part in many information sessions regarding the details of these key areas to blockchain technology and how it can impact our clients and the way we do business in the near future.

The key concepts we particularly focus on as auditors (and you should, too, with respect to blockchain) are security, trust, and verifiability. We ask:

  • How is the blockchain built?
  • How is the underlying data encrypted and how can we verify the integrity of the encryption?
  • Who are the users and who has the ability to post transactions to the blockchain network?
  • What is being transacted?
  • Who validates transactions and maintains records of the ledger?
  • What access points do we have to the ledger?
  • Do we have access to multiple points of verification?
  • Is a trusted third party involved in the validation of transactions and ledger maintenance, or is it a trustless application with distributed functionality?

In other words, a fundamental concern is whether the blockchain is centralized and vulnerable to record alteration, or whether the validation/maintenance functions are decentralized and distributed across a wide network of participants. This essentially provides an unalterable/immutable/censorship-resistant ledger with network consensus.

At REM, our Think Lab is working diligently to develop our knowledge base and identify best practices in embracing and utilizing this powerful tool. Feel free to contact us with your questions and your concerns about how blockchain might improve your business.


Click here for a quick primer on blockchain terminology.

Source (For enlarged version, click here.)

Wake-Up Call - Valentine's Day edition

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Posted by REM Cycle Staff

The Wake-Up Call is The REM Cycle’s biweekly compilation of newsworthy articles pertaining to taxation, accounting, and life in general. Got a hot tip? Email us at REMCycle@rem-co.com.

As accountants, we get excited about numbers. (Maybe a little too much.) We got to wondering: What percentage of Americans celebrate Valentine's Day? How much does the average adult spend on gifts? How many gallons of wine get sold that week? Grab some heart-shaped chocolates and dig into this handy infographic of Valentine's Day by the numbers. [history.com]

Currently filing joint, but about to file as single? Take note: divorce agreements entered into or amended after December 31, 2018 will no longer be picked up in income (recipient) or a reduction of income (payor) due to the Tax Cuts and Jobs Act. [Taxbot.com] (See REM's full list of changes here.)

Between 30-40% of Americans will rely primarily on Social Security for income after age 65. But how much of that Social Security is taxable? The amount you receive will determine whether the IRS will take a chunk, but the likelihood is that you won’t have to pay state tax at all: Check out this list of 37 States That Don't Tax Social Security Benefits. [The Motley Fool]

Valentine’s Day is a good time to review the new tax brackets. Whether you’re filing single, married jointly, head of household, or married filing separately, the likelihood is that the new tax law has changed the rate you’ll pay this April. (Who says romance is dead?) [Business Insider]

Think you’ve heard the worst of the Equifax data breach? Think again. Tax ID numbers, credit card expiration dates, and even the states that issued the consumers’ driver licenses were accessed by hackers. [AP News]

ICYMI: Love is in the air in Date Night with Taxes [YouTube].