Blockchain in accounting research: current trends and emerging topics

• Bookkeeping
• 15 de março de 2023

Blockchain has the potential to enhance the accounting profession by reducing the costs of maintaining and reconciling ledgers, and providing absolute certainty over the ownership and history of assets. Blockchain could help accountants gain clarity over the available resources and obligations of their organisations, and also free up resources to concentrate on planning and valuation, rather than recordkeeping. In a double-entry accounting system, you record a debit and a credit of the same amount at the same time.

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Nor are all market participants eager to treat cryptoassets as a security due to their volatility, making it difficult to ascertain an appropriate value to record for income statement and balance sheet purposes (Smith et al., 2019; Tan and Low, 2019). Finally, it is worth noting that financial accounting is characterised by accounting prudence and conservatism, which can lead to differences between a company’s market and book value (Dumay and Guthrie, 2019). As cryptoassets are often cash flow statement template for excel characterised as a potential future economic benefit, their acquisition may lead to even greater discrepancies between the market and book values of companies, especially in markets with optimistic valuations of intangible assets. Details on the potential of blockchain, its implications for auditors, how the accountancy profession can lead and what skills are necessary for the future.

To become truly an integral part of the financial system, blockchain must be developed, standardised and optimised. This process is likely to take many years – it has already been nine years since bitcoin began operating and there is much work still to be done. There are many blockchain applications and start-ups in this field, but there are very few that are beyond the proof of concept or pilot study stage. Accountants are already participating in the research, but there is more for the profession to do.

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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). Blockchain may also lead to more disclosures of non-financial information, such as that related to sustainability and corporate social responsibility. They may wish to quantify and make visible “feel-good” information as a counterpart to the financial (Smith, 2017).

1 The research questions

1. Researchers should analyse how blockchain ecosystems evolve and are applied (Benjaafar et al., 2018).
2. Blockchain technology development is still in its early stage, fraught with failures and will certainly look very different in a few years.
3. 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”.
4. This review affirmed the results of the LDA analysis and gave us the opportunity to offer a critique and gain more insights while identifying future research directions.

The influence of blockchain on risk management and companies’ performance indicators is another promising area for future research as there is a need to identify how stakeholders’ value creation may be affected by implementing blockchain (Cai, 2018). It would also be worth examining whether the response of managers towards blockchain varies in different industries (Cao et al., 2018). Burragoni (2017) argues that implementing blockchain in the finance industry might help overcome the threat of a shadow economy, given the improved transparency and legitimacy on offer, but this is an assumption that needs further justification.

These can include supply chain tracking, digital rights management, real estate title transfer, and other forms of real-world asset digitalization. Deloitte COINIA is an extension of Deloitte’s award-winning Cortex platform, a cloud-based data platform that harnesses the power of data by securely and seamlessly integrating data acquisition with data preparation and analytics. It combines advanced technology with business processes to generate meaningful and valuable insights in a repeatable and consistent fashion. The subject of cryptocurrency is complex, and its decentralized nature means there are a number of regulatory issues accountants will eventually have to deal with.

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. This paper provides a structured literature review of blockchain in accounting. The authors identify current trends, analyse and critique the key topics of research and discuss the future of this nascent field of inquiry. Reconciliation of accounting data will not be fully automated through blockchain technology as auditors’ professional expertise and experience is required to assess the accuracy of complex accounting transactions. However, the ability to trust that both parties are recording the same base transaction information and the real-time availability of this accounting data offers immense benefits for the efficiency with which accounting data can be reconciled and analyzed.

This step also helped us validate that the papers and topics identified by the LDA analysis were among the most cited. Importantly, while technologies provide unparalleled benefits in the audit process, they do not stand alone in the transformation of the audit. The promise of this powerful combination is not just a game changer for the audit world, but also a benefit for organizations and a boost to investor confidence overall. With Deloitte COINIA, hundreds of thousands of addresses can be loaded in bulk for a variety of crypto assets, and Deloitte can see 100 percent of the transactions and reconcile them to clients’ books and records. Deloitte COINIA also assists with off-chain verification of private key ownership by using an innovative, custom-developed workflow to confirm the integrity of a signed message.

Further, if blockchain is implemented on a broad scale, accountants will not only have more information for planning and control, they may be required to synthesise it. This, too, will change the role of accountants, particularly management accountants. No longer relegated to the back office, accountants would likely take a much more prominent position as agents of intelligence, advising, communicating and attempting to closely link their firm’s activities to strategic decision-making. Hence, if transparency is key, implementing blockchain may help to enhance a company’s competitive advantage (Deloitte, 2019), and it should certainly help to cultivate trust between market participants (Yu et al., 2018). Rather, it involves all the computers in the network, so blockchain does not suffer from point of failure events. Nor can individuals collude to override controls or illicitly change or delete official accounting records (Wang and Kogan, 2018).