Auditing requires the confirmation of transactions and balances on firms’ accounting ledgers at the end of the reporting period due to time-lags, reconciliations, and accounting entries. Thus, the analysis of the sources reveals a high number of conference proceedings in computer science and engineering and a higher number of relevant publications in scientific journals in the area of business and management. In the original definition, blockchain is defined as a dispersed ledger of learn how to get a tax id number in canada chained and consecutive cryptographic blocks, and each block is registered on peer to peer networks (McAliney and Ang, 2019). The nodes also work in the same direction and are validated by the network’s other components (Rien Agustin and Susilowati, 2019). This study adopts a hybrid methodology, quantitative and qualitative, combining bibliometric and code analysis (Cobo et al., 2011; Massaro et al., 2016). The first step to answering the three RQs was to create a review protocol.
- But with the advent of blockchain technology, accounting processes have become more reliable and secure than ever before.
- In a decentralized environment, all participants have access to the same information and users can then choose to share it or not.
- Developing professional knowledge and understanding of this emerging technology and its applications will be crucial to ensuring the profession’s relevance and future readiness.
- Cryptographic hashes remove the ability to change information and facilitate the protection of data even after archiving (White and Daniels, 2019).
- Auditors could extend their services to work as accounting blockchain information systems administrators or advisors (Bonyuet, 2020).
- Fifth, in terms of blockchain definitions, the coding analysis confronts the standardized definition of McAliney and Ang (2019).
Side by side with artificial intelligence (AI), it is an emergent trend holding an underlying transformative force. Hence, BC is a topic that concerns all organizations at any corner of the globe, regardless of its typology and dimension. Francesca Dal Mas has a bachelor’s and a master’s degree in Business Administration from the University of Udine, Italy, a law degree from the University of Bologna, Italy, and a PhD in Managerial and Actuarial Sciences from the Universities of Udine and Trieste, Italy. She is a Senior Lecturer in Strategy and Enterprise at the Lincoln International Business School and an honorary research fellow at the Sapienza University of Rome. She is an international assessor for the MIKE – Most Innovative Knowledge Enterprise Award for Italy and Iran.
What are the challenges of applying Blockchain in Accounting?
This is particularly interesting in the context of the energy sector, where renewable energy and carbon credits are intangible tradable items. The application of blockchain to supply chain management is particularly intriguing in relation to the monitoring of workers’ rights, slavery and unethical behaviors because it contributes to tracking and assuring the entire process. Today, the use of blockchain in the financial field is still largely in an investigative stage. From what I’ve seen, nearly all major financial organizations are exploring how to best implement blockchain technologies into their infrastructure, with tech giants who have traditionally been tied to the financial industry beginning to roll out various products. Those who work in accounting don’t yet need to know all of the ins and outs of blockchain technology, but it’s definitely time to keep an eye on developments at least within your organization. Companies such as Verady have already created bridge technology between crypto assets, exchanges and accounting software.
This analysis covers the third phase, starting in 2015 with an exponential increase from 2016 to date (Figure 1). (2021), “The disruption of blockchain in auditing – a systematic literature review and an agenda for future research”, Accounting, Auditing and Accountability Journal, Vol. Fourth, in our SLR, we underline that the impact of this technology on accountability remains relatively unexplored.
Specialist Finance Qualifications & Programmes
They may also help journal editors decide on calls for special issues as interest in this topic grows. There is no commonly shared point of view among researchers on the best way to regulate cryptoassets. Some say that they fit in with the existing accounting standards, while others state there is a need to develop a new regulatory framework that will decrease the probability of fraud (Auer, 2019; Pimentel et al., 2019). For example, there is a high demand for developing regulations for ICOs, cryptoassets that do not offer investors concrete products or services but provide an opportunity for capital gains from reselling cryptocurrencies in the future (Zhang et al., 2021).
Accounting information may be verified by different actors thanks to the assurance abilities of blockchain and because companies can continuously share information. Moreover, there is the possibility to automate some external auditing functions over the blockchain to improve audit quality and narrow the expectation gap between auditors, financial statement users and regulatory bodies (Rozario and Vasarhelyi, 2018). Some authors call for the appearance of a new brand of auditor that can offer attestation services for independent evaluations of blockchain controls (Canelón et al., 2019; Sheldon, 2019). Besides accounting, blockchain technology can also impact the auditing field. Essentially, auditors confirm transactions and balances from the financial statements.
The impact of blockchain technology on audit
The blue line includes all 346 research products assessed for discussion. The green line represents all 127 research products that belong to the “Accounting and Auditing” topic. The yellow line depicts articles published in journals ranked as “ACCOUNT” by the ABS AJG2021 journal ranking. Figure 1 shows a considerable increase in interest since 2016, in which year accountants and practitioners began to seriously consider blockchain as an accounting tool (Kokina et al., 2017).
How can Blockchain be used in Auditing?
Using LDA helps us capture the idea of a document being composed of a (predetermined) number of topics that represent a probability distribution over a vocabulary. The number of topics is optimised using grid-search and coherence of topics (Röder et al., 2015). The model also supplies a list of articles that most strongly “belong” to each topic. One of the primary drivers of the invention of blockchain was the Bernie Madoff scandal was able to run a large-scale Ponzi through running multiple sets of books. This way, he had multiple sources of truth and could swap and trick stakeholders into thinking of different books as authentic. In this article, we have identified a need for more education as the primary driver of this inhibitor.
Blockchain in Accounting: An Extensive Guide
The blue shaded areas on the map represent research cooperation among nations. Additionally, the pink lines linking countries indicate the extent of collaboration among the authors. It is interesting to see which countries have the most publications on accounting, auditing, accountability and blockchain.
As such, a literature review on the status of blockchain in accounting is both topical and timely. The insights provided into this emerging technology will have implications for the accounting ecosystem–some beneficial, others challenging. Hopefully, this SLR will serve as a helpful baseline for practitioners, professionals and academics as we navigate the next potential revolution in accounting information systems. Davide Calandra is a PhD candidate in Business and Management at the University of Turin (Italy) ‐ Department of Management. His doctoral course focuses on new technologies applications in accounting, the health sector, and the business model field. He is particularly interested in blockchain, and he is currently studying the impact of this “disruptive” technology in the accounting, auditing and accountability fields.