How Blockchain Can Improve Aviation Auditing

Blockchain is essentially an irreversible decentralized digital ledger that can store information indefinitely. By definition, it already acts like what an auditor needs for their audit to be more efficient and accurate. In aviation, just like any other industry, auditors are required to ensure that everything is compliant, correct, and secure. In fact, it requires more audits than any other industry as there are thousands of moving elements that are interconnected to each other.

Unfortunately, since the aviation industry is highly complex, issues are bound to happen. In fact, a well-renowned auditing firm Deloitte found that greater than 60 percent of the issues found with receiving parts were due to poor or missing paperwork, and on average it took 34 days to correct the problem. It not only affects the operations, but it is a major obstacle for auditors to audit the industry efficiently and accurately.

Knowing these pain points, this is? where blockchain can drastically improve auditing for aviation companies :

1.Safety Audit

The aviation industry consists of thousands of moving elements,? collaborating with one another, may it be a maintenance, parts distribution, or others. Whilst all these elements may be different,? it all comes down to making sure that all aspects are done precisely and honestly as they should be. But with conventional methods, there is a huge emphasis on human trust for each process and long and detailed databases could be modified by bad actors, making it difficult to track.?

Imagine you are a safety auditor, you are tasked to audit a fleet of airlines as required by the government authority. The fleet has been around for years, maintenance has been done by hundreds of engineers, and it has flown through thousands of routes. To audit such a fleet, it would require a very long time, incredible meticulousness and an unhealthy amount of trust as there might be the possibility that records can be altered.?

But by integrating blockchain, aviation companies can track and fortify the history of their fleets. Maintenance records, fleet history, and other vital records can be recorded on a block, stored forever in an easy-to-search database that auditors or even government officials can access to check compliance. The records can be made public, where everyone can access them, or made private yet modular that can be integrated into an ERP to further improve the inner workings of the airline. No more sifting through countless paperwork or re-verifying a document for its authenticity because what is in the blockchain cannot be altered and can yet be recalled very easily.

2. Financial Auditing

Aviation companies are often held by multiple parties or governments as the capital required for running the company is substantial. Therefore a financial audit is paramount to measure the health of the company, its compliance with the regulator, tax purpose, etc. But the aviation industry consists of complex supply chains, transactions, and vendors that process millions of dollars per day.

Just like how anyone can track a bitcoin transaction from the very first transaction with ease, so does any other financial system that has been integrated with blockchain. With block explorer like blockchain.com everyone can peek inside any block or any wallet to look for any transaction on the bitcoin network. This is the same feature that is highly needed for auditors to be able to audit faster and more accurately the financial side of saying an aviation company. With blockchain integration into the ERP or finance systems of aviation companies, even microscopic transactions can be traced back to their origin. The data cannot be altered as well, and any new alterations will have a history that can hold a party responsible.

These are two major improvements that the aviation industry can integrate to their inner workings to provide a better way for audits to be conducted. 3IPK can assist the blockchain transformation of any aerospace and aviation enterprise, with its multi-year experience as well as expertise in both blockchain and aerospace industries.

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