On January 10, the Securities and Exchange Board of India (SEBI) banned PricewaterhouseCoopers ( PwC), one of the "Big Four" Satyam's accounting fraud scandal, followed by its downfall, broke on January 7, 2009, when Satyam's president, Satyam Computer Services, refused to spot an accounting fraud $ 1.7 billion. Byrraju Ramalinga Raju admitted to having fictitiously exaggerated the cash balance of the company by $ 1.7 billion or 94% with the help of his PwC auditor. Due to this accounting scandal, Satyam shareholders lost up to $ 2.2 billion due to the value of their stock

As an independent guarantor of financial information of Satyam, PwC ignored the flagrant anomalies "in financial details reported by Satyam, who inflated his business with 7,561 false invoices.

Arthur Andersen was auditor of Enron Corp. ., whose shareholders lost $ 74 billion in the worst corporate accounting scandal in 2002. Arthur Andersen not only violated public confidence by contributing to Enron's accounting fraud further by obstructing justice. Arthur Andersen 's accountants rolled up their sleeves and shredded tons of Enron' s fraudulent accounting / audit records while billions of business losses hidden in off – the – board entities. bila n have been submitted to the US government review. On March 14, 2002, the United States Department of Justice closed Arthur Andersen by criminal charges. This has reduced the number of major global accounting firms from "Big Five" to "Big Four".

The three-entry accounting system debuts on Blockchain

As the sun set in India on Satyam and PwC because of their collective corruption ventures, in the land of the rising sun – Japan – a new three-entry accounting system made its world debut on January 9, 2009. A programmer (or group of programmers) using the pseudonym Satoshi Nakamoto launched the revolutionary Blockchain network and the first units of the Bitcoin cryptocurrency, allowing people to send it across borders, peer-to-peer on the Internet, reliably and securely.

Nakamoto's Blockchain technology was the first example of a three-entry accounting system, proposed in 1989 by Professor Yuir Ijiri, CPA, and then by cryptographer Ian Grigg in 2005. Defined as an open registry and distributed – Blockchain technology records and ver transactions without any central authority of trust. Blockchains are resistant to data modification and can not be modified retroactively. The technology dramatically reduces the potential for errors when reconciling complex and disparate information from multiple sources. Because every transaction is recorded and verified, the integrity of financial records is guaranteed, making it virtually impossible to falsify or destroy documents. Blockchain technology is designed to ultimately reduce fraud, as well as the need for auditing resources.

India and Blockchain

India has not yet done blockchain accounting with its triple entry accounting system. According to Indian accounting standards for companies (Ind AS), 2015 G.S.R. 111 (E) different classes of companies are required to use a dual entry accounting system, which was formulated in Korea during the Goryeo Dynasty (918-1392).

While it is hard to break with tradition, the Indian government at the state and federal level is pushing to adopt Blockchain technology with its three-entry accounting system with great strength to transform the company's business. 39, economy of India – which is the seventh and fastest growing in the world.

Through Satyam The most striking example of the transformation of Blockchain technology in India was the scandalous sale of Satyam in 2012 to rival Tech Mahindra who initiated multiple Blockchain initiatives over the past year. 2017 quarter. Energy trading in Australia Power Ledger and Tech Mahindra are testing micro-networks on Blockchain, a new platform allowing households and businesses to trade their power from solar panels and storage of battery, and it also facilitates the crowdfunding (ICO) of renewable energy assets. Tech Mahindra also announced that she was working on the development of a solution using Blockchain technology for vehicle registration and related activities

On the side of the federal government, the State Bank of India has pledged to implement Blockchain with over $ 460 billion solutions in a number of financial processes, including the management of its Know Your Customer (KYC) system. "In the future, virtually every function in the financial services sector will be displaced, disintermediated and decentralized," said Ron Quaranta, president of the Wall Street Blockchain Alliance, which has partnerships with Asian countries. -Pacific at an American Institute of Certified Public. Accountants / CPA.com Executive Roundtable

On the government side of the state, Andhra Pradesh became the first state in the country to pilot Blockchain technology in two departments, the cadastre and the transport. This was followed by the state of Maharashtra announcing the use of the integrated Blockchain platform to secure various government data, potentially including land title records.

The Blockchain and Cryptocurrency Regulations in India

India is in the process of developing legislation on Blockchain and Cryptocurrency.

In April 2017, the Indian Government formed an Interdisciplinary Committee chaired by the Special Secretary (Economic Affairs) to review the existing legal framework for cryptocurrencies. formulating appropriate regulations

In June 2017, Indian Prime Minister Narendra Damodardas Modi announced a complete overhaul of the Indian Goods and Services Tax (GST) system. But there is still clarity on the application of international, federal and GST taxes on Blockchain technology and cryptocurrencies.

The Indian Supreme Court urged the government – the central bank and other agencies – to respond to calls to regulate cryptocurrencies as soon as possible.

In response, India's Finance Minister, Arun Jaitley, clarified that the government does not recognize cryptocurrency as legal tender.

Selva Ozelli, CPA, CPA is an international tax attorney and CPA who often writes on tax, legal and accounting matters for TaxNotes, Bloomberg BNA, other publications and the OECD

The opinions and interpretations contained in this article are those of the author and do not necessarily represent those of Cointelegraph.

Selva Ozelli, Esq., CPA is an international tax expert and CPA who often writes on tax, legal and accounting matters for TaxNotes, Bloomberg BNA, D & # 39, other publications and the OECD.