Impact of Blockchain on the Accounting Profession Deloitte Audit

For instance, as in Secinaro and Calandra’s (2020) and Zaheer et al.’s (2019) studies, our study offers broad perspectives on past research methodologies to address future research challenges. Besides, our analysis focuses on blockchain business processes in the field under study and not just applications (Casino et al., 2019). Still, we analyze the characteristics of blockchain while providing indications of the definitions and technical structures most used in the literature. Furthermore, our analysis looks beyond blockchain and attempts to define, whenever possible, a connection with other technologies paving the way to new future research.

  • The corpus comprised 153 academic papers from two ranked journal lists, the Association of Business Schools (ABS) and the Australian Business Deans Council (ABDC), and from the Social Science Research Network (SSRN).
  • Consensus is the agreement between all the network subjects who have access to the data exchanged through blockchain and allows all the actors to validate new blocks and nodes (Brown-Liburd et al., 2019; McCallig et al., 2019; Smith, 2018).
  • Here, we searched for “accounting” AND “blockchain” or “accounting AND distributed ledger” over the same period and found 68 papers, some of which overlapped with papers already retrieved.
  • Some in our audience may think that blockchain has been in a bit of a lull.
  • The interdisciplinary conference proceedings focused specifically on technological innovation.

O’Leary (2017) also suggests applications, including accounting, auditing, supply chain and other transaction information types. Dai and Casarhelyi (2017) are among those who provide the best ideas related to the use of blockchain technology as a verifiable, transparent, real-time tool aimed at defining an accounting system useful for supporting accounting and assurance (Dai and Vasarhelyi, 2017). Dai and Casarhelyi’s (2017) influence, with that of Moll (Moll and Yigitbasioglu, 2019), Schmitz (Schmitz and Leoni, 2019), what is w2 form and how does it work Kwilinski (Kwilinski (2019), lay the foundations for Wang and Kogan (2018) and (Carlin, 2019). Furthermore, Wang et al. (2018) demonstrate how blockchain-based transaction processing systems (TPSs) can in real-time accounting, monitor fraud prevention continuously. Finally, Wang et al.’s (2018) studies are the basis for Schmitz and Leoni’s (2019) analyses. Finally, the study of Carlin (2019), influenced by Dai et al. (2019), is the most advanced for blockchain and accounting studies focusing on double entry.

1 Dataset creation

We argue that in the future, researchers should investigate the sustainability and environmental issues related to blockchain in more detail. This study’s analysis combined a structured literature review with citation analysis, topic modelling using a machine learning approach and a manual review of selected articles. The corpus comprised 153 academic papers from two ranked journal lists, the Association of Business Schools (ABS) and the Australian Business Deans Council (ABDC), and from the Social Science Research Network (SSRN). From this, the authors analysed and critiqued the current and future research trends in the four most predominant topics of research in blockchain for accounting. Following this introduction, the second section presents the details of our SLR methodology and introduces bibliometric visualizations of the 346 included research products. The next section discusses the primary and most impactful contributions on the links between blockchain and accounting and auditing (Section 3.1), finance innovations and the representation of cryptoassets (Section 3.2) and business model innovation and supply chain management (Section 3.3).

  • We used a thesaurus file to merge similar keywords (e.g. “audit” and “auditing,” “cryptocurrencies” and “cryptocurrency”).
  • Security is the prime feature that comes along with this accounting system.
  • LDA allows us to explore latent relationships between terms and topics in a sample, identify the most representative articles for each topic and identify the trends within the topics.
  • Kokina’s 2017 contribution enables academics to identify blockchain’s application and future development in accounting applications.
  • Still, we analyze the characteristics of blockchain while providing indications of the definitions and technical structures most used in the literature.
  • Blockchain makes it possible to write verified transactions to a distributed ledger in a secure fashion, without a central authority, between untrusted parties, creating an undeniable past, value for each node and adding value (trust) to those transactions.

To help enlighten accountants on what they need to know now about blockchain, the JofA spoke with Erik Asgeirsson,’s president and CEO, and Ron Quaranta, founder and chairman of the Wall Street Blockchain Alliance, a trade association promoting comprehensive adoption of the technology. The AICPA and are leading the accounting workgroups for the alliance., the AICPA’s technology and business subsidiary, put out an accounting technology version of the Gartner Hype Cycle with blockchain having nearly completed a precipitous fall from the height of inflated expectations into the trough of disillusionment.

Three further risks are often raised, each surrounding changing business processes (Canelón et al., 2019; Coyne and McMickle, 2017; Kokina et al., 2017). The first relates to the centralisation of computing power, also called the “51% attack risk”, which can happen when most of the computing power in a blockchain’s network is centralised. In this case, whoever controls that power can, with impunity, discard a valid link in the chain or substitute an invalid block for a valid one. The second risk is transaction malleability, which occurs when an attacker copies a transaction and modifies it to receive tokens (payment) then claims that no tokens were ever received.

3 New business models involved

(2018), “Auditing with smart contracts”, International Journal of Digital Accounting Research, Vol. The following views regarding the future research trends were framed by the insights in the previous section and reviewing the most representative papers for each topic. The disruptive potential of accounting technologies can only be fully realised with a similarly profound revolution in accounting thinking. Without an accompanying “mental revolution”, new technologies may result in incremental as opposed to step change.

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. Starting from Massaro et al. (2020)’s analysis exploring the crypto economy, we wanted to examine whether the authors’ discussion focuses on the analysis of new business models based on blockchain.

Business Technology Overview

The articles retrieved from Scopus were compared with the Web of Science database to ensure no significant sources were missed. Nonscientific sources such as nonpeer-reviewed books and white papers were excluded. Even though we anticipate that blockchain will influence accounting and auditing, we do not assume they will be totally replaced.

Finance in a Digital World

They have the opportunity to guide and influence how blockchain is embedded and used in the future, and to develop blockchain-led solutions and services. These judgemental elements often require context that is not available to the general public, but instead require knowledge of the business, and with blockchain in place, the auditor will have more time to focus on these questions. Alongside other automation trends such as machine learning, blockchain will lead to more and more transactional-level accounting being done – but not by accountants.

New challenges and opportunities for audit and assurance

He holds a master’s degree in Economic Sciences ‐ Firms Administration and Control at the School of Management and Economics in Turin with full marks. He also has a master’s in management of local health facilities and hospitals from the University of Turin. In recent years, he is particularly interested in new technologies and their role in accounting and auditing. Additionally, as Schulz and Nicolai (2014) stated, the bibliometric approach makes it possible to analyze the degree and direction of a particular field and is particularly suitable for the second RQ. Therefore, the goal is to analyze the growing literature evidence in blockchain strictly connected with accounting, auditing and accountability.

For example, several authors discuss the advantages of using blockchain to record transactions on a real-time basis (Yermack, 2017; Dai and Vasarhelyi, 2017). Routine accounting data would be recorded permanently with a timestamp, preventing it from being altered ex-post, which Alles (2018) argues would further ensure the reliability of current accounting information systems. Real-time accounting would also reduce the potential opportunities for earnings management (Yermack, 2017). Additionally, using blockchain means anyone can review all transactions, even those that may be suspicious or related to conflicts of interest.

Highly cited articles represent a “corpus of scholarly literature” that can help “develop insights, critical reflections, future research paths and research questions” (Massaro et al., 2016, p. 767). To conduct a citation analysis, we use citation counts based on Google Scholar data, based on queries employing Harzing’s Publish or Perish software as of 5 March 2021. This step also helped us validate that the papers and topics identified by the LDA analysis were among the most cited. The authors’ structured literature review uniquely identifies critical research topics for developing future research directions related to blockchain in accounting. Chang et al. (2019) find that a blockchain-based supply chain process could enable instant tracking, reduce costs related to updating information, improve cash liquidity, enable automatic payments and, in general, improve automation. Choi et al. (2020) argue that blockchain can reduce information auditing costs, increase the proportion of information-sensitive consumers and reduce demand volatility.

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