It will be important to monitor the progress in the take-up of blockchain in the future (Bonsón et al., 2019; Gietzmann and Grossetti, 2019; Bonsón and Bednárová, 2019). More papers applying machine learning techniques will help to gather information from reports, and web crawlers will be able to discover new aspects of how blockchain technologies have been implemented in practice. Combined with manual analysis, these data will help to chart new paths forward for researchers. At the same time, these innovations can create a favourable organisational climate that can overcome barriers and resistance to change (Clohessy and Acton, 2019). Future research might therefore investigate the structure of management bodies and the role of top management in blockchain implementation.
As a result, accountancy is likely to become a much more strategically oriented profession. Blockchain may also lead to more disclosures of non-financial information, such as that related to sustainability and corporate social responsibility. The transparency of blockchain might prompt companies https://intuit-payroll.org/ to do more explaining. They may wish to quantify and make visible “feel-good” information as a counterpart to the financial (Smith, 2017). Additionally, blockchain provides opportunities to collect qualitative social and environmental data, which will continue to require assurance in the future.
Because blockchain is a distributed system, all changes to a ledger are transparent to all the members of a network. (2021), “The disruption of blockchain in auditing – a systematic literature review and an agenda for future research”, Accounting, Auditing and Accountability Journal, Vol. The main aim of the present study is to review the literature on the use of blockchain in accounting practice and research and to define potential opportunities for further investigation. Some authors (Chang et al., 2019; Kumar et al., 2020) suggest that future supply chain systems will be formed through integrations of blockchain into current systems, and a hybrid system with public on-chain data and private off-chain data will be used. Furthermore, major complementarities emerge between blockchain and RFID (van Hoek, 2019), IoT and ERP (Kayikci et al., 2022).
- In addition, the auditor can utilize the real-time data from the blockchains without searching for updated values.
- The blockchain accounting system is gaining a strong stance as many large accounting firms have initiated educating employees on blockchain technology.
- Blockchain accounting applications can also make it easier for accountants to file tax returns.
- As a result, the blockchain stores all the transactional data that satisfies the conditions.
The double entry system helped to verify the financial condition by balancing the credit and debit entries. In this case, that block will not be accepted as others on the network have multiple copies of the same data. The block functions as the storage device for all the transactional data. Smart contracts can easily and cost effectively transfer ownership of a car or transfer corporate shares without needing a third party, such as a bank or a stockbroker, and with immediate settlement. It is this removal of “middlemen” by enabling trusted peer-to-peer exchange that is driving what some have come to refer to as “Web 3.0”, and the creation of $2 trillion of wealth in the last ten years.
Still, if it depends on third-party networks to serve use cases, it breaks the immutable traceability of transactions that blockchain so effectively offers. In the coming decade, demand for digital identity solutions will create a market for QTSPs. Individuals and organisations can choose which QTSP they want to attest to their digital signature on the blockchain. This introduces a network of portable digital signatures that can be interfaced, trusted, and leveraged in multiple applications and interfaces. This brings trust not only to exchanging invoices but could be extrapolated to any information type, from media to articles, to credentials and any other type of asset. Layer-two solutions pretend they have the same level of security because they are anchored to a base layer blockchain protocol with many nodes.
Strengthening trust in the profession
Hojckova et al. (2020) study the success factors of blockchain-based P2P electricity trading. Bolici et al. (2020) analyze discussions about blockchain and tourism on Twitter. They highlight that the public interest in this specific topic is strong and positive.
Finally, because cryptos fulfill the asset definition but are not tangible or a type of asset included within the scope of principles other than IAS38, they can be considered intangible assets. Thus, cryptos fall under the accounting rules for “Intangible assets with indefinite useful lives” (IAS 38.107), so they cannot be amortized but only impaired. Furthermore, if an active market exists, then intangible assets can be valued at fair value (IAS 38.75) (Procházka, 2018; Morozova et al., 2020; Beigman et al., 2021). Accounting for cryptocurrencies as cash falls under IAS21 “The Effects of Changes in Foreign Exchange Rates” if one adopts a broad definition of cash that goes beyond legal tender status (Procházka, 2018; Hampl and Gyönyörová, 2021).
Some in our audience may think that blockchain has been in a bit of a lull. I mean, there was a ton of hype about how it was going to change everything and, you know, change wasn’t instantaneous. The blockchain has gone from the peak of inflated expectations down to the trough of disillusionment. But it’s maturing, and it may be changing very quickly what you hear, thanks in part to a decision or a release recently by the IRS. If this subject interests you, understanding closing your books will help you more easily see the promising value of blockchain. During an audit, an accounting professional can easily confirm that a transaction happened, but the transaction details aren’t recorded.
VISMA pushes for e-invoicing innovation with one global public integrity network to compete and collaborate.
The results of Table 4 allow us to confirm our choice of the topics for further analysis. The top 10 papers with the highest citations per year belong to one of the four research topics that have the marginal distribution over 10% represented in Table 2 and account for more than a half of the overall distribution. Figure 1 demonstrates that the volume of articles on the topic is increasing annually. The first articles began to appear in 2015 and, by 2019, 4 articles had increased to 40 papers, with 35 already published just in the first half of 2020. (2019), “NFTs in practice – non-fungible tokens as core component of a blockchain-based event ticketing application”, Paper presented at the 40th International Conference on Information Systems, ICIS 2019. If buying and selling cryptocurrencies was part of the ordinary business of an entity, then it would be possible to account for cryptocurrencies as inventory.
Future research directions
Essential roles for auditors in the future will be assuring the reliability, credibility and authorisation process of blockchain transactions. Blockchains do not provide a guarantee for transactions taking place in the real world. Even if they are recorded onto blockchains, transactions may still be fraudulent, illegal or unauthorised. Hence, given the need for auditors to detect and investigate transaction errors or fraud, the argument of auditors becoming obsolescent is not evident.
In machine learning, there are many different text mining techniques, each designed to suit different types of data and different end purposes (see Wanner et al., 2014 for a comprehensive review). We used a Latent Dirichlet Allocation (LDA) model, which is well-suited to providing a systematic and non-biased method of investigating a body of literature (Cai et al., 2019; El-Haj et al., 2019; Black et al., 2020; Bentley et al., 2018; Fligstein et al., 2017). El-Haj et al. (2019, p. 266) explain that LDA leads to “wider generalizability, greater objectivity, improved replicability, enhanced statistical power, and scope for identifying ‘hidden’ linguistic features”. Research shows LDA to be a relevant and useful tool for working with both big and small literature corpora (e.g. Li, 2010; Asmussen and Møller, 2019; El-Haj et al., 2019). Asmussen and Møller (2019, p. 16) highlight that applying LDA to even small sets of papers provides “greater reliability than competing exploratory review methods, as the code can be rerun on the same papers, which will provide identical results”.
He has worked with various organizations to streamline their petty cash management processes and reduce inefficiencies. He has also written several articles on financial management for leading publications such as Zensuggest and The Wall Street Journal. Blockchain technology in accounting will immensely support accountants because the accounting system will get more sophisticated, speedy, and precise. In addition, data availability will not be an issue while validating the transactions. Blockchain is a pretty isolated technology; not many people understand the concept. But there is no denying that its penetration is increasing in most industries.
Many understand the value thesis of a single global blockchain, just like the thesis of a single global internet, but only some believe in the technical feasibility of this vision. At mintBlue, we have a clear idea and pragmatic approach to how a global blockchain can achieve this through our integrated partnerships with specialised R&D firms, universities and professional data centres worldwide. As discussed earlier in this article, organisations, including the EU Commission, tend to pull the trigger on a technology choice followed by a ‘not-invented-here’ syndrome whenever a new solution architecture is proposed. An apparent downside of EBSI is the disbursement of the integrity network it causes, as EBSI holds a prominent position of trust.
Chartered professional accountants (CPAs) should also know about blockchain’s applications in financial planning, record-keeping, and even tax audits. Blockchain accounting uses smart contracts, a program that executes the functions automatically. Moreover, this advanced technology helps to streamline audit and financial reporting processes. Speaking of basic approach to process costing in cost accounting the accounting profession, blockchain technology in accounting has gained immense popularity. It can be used to record and manage almost every financial transaction in a protected and effective manner. The blockchain accounting system is gaining a strong stance as many large accounting firms have initiated educating employees on blockchain technology.
But a lot of stuff you mentioned, they’ve got to know these terms, so they can have some idea of what their clients are talking about. As shown in the graphic below, the next stages on the hype cycle for blockchain are the slope of enlightenment and the plateau of productivity. This means they are taking blockchain more seriously and that it might be a good idea for you to as well.