Additionally, blockchain provides opportunities to collect qualitative social and environmental data, which will continue to require assurance in the future. La Torre et al. (2018) argue that blockchain will generate an automatic assurance system for non-financial information that could substantially modify the current assurance paradigm. Two of the most widely discussed topics–“the changing role of accountants” and “the new challenges for auditors”–only seem to be getting more popular.
- This is achieved via a triple entry accounting system that, essentially, maintains three ledgers, one each by the seller, the buyer and a public set of (cryptographically authorized) records.
- The ability to adapt to keep pace with an increasingly evolving business environment and technological context will also be important.
- They may also help journal editors decide on calls for special issues as interest in this topic grows.
- Here are some facts about the blockchain ecosystem and how it will influence accounting in 2021 and beyond.
Report an issue or find answers to frequently asked questions
The top accounting journals from the ABS and ABDC rankings appear to be resistant to the blockchain field of research, as they have published only a few papers non-profit organizations wex lii legal information institute devoted to the technology. This could be because those journals are less friendly towards phenomenon-based research (Von Krogh et al., 2012) than fundamental research or that the publication process takes much longer, and we will see more papers in the upcoming years. Another reason could be that most existing articles are normative and are looking at the future applications of blockchain. For now, we observe that, with the blockchain landscape changing daily, and ideas and research needing to reach the target audience faster than the traditional journal route allows, researchers are turning to SSRN to share their tentative findings (Holub and Johnson, 2017). We also observe that Australian scholarship is now leading the blockchain research in accounting, as more papers were published in journals included in the ABDC ranking compared to the ABS ranking.
Digital learning materials
A well-developed regulatory framework may help tokens become a legitimate means of exchange in ecosystems that will start growing in the future. Further work is required from accounting bodies to accept new types of digital assets and develop standards that will solve the issues related to their recognition, measurement and disclosure. In the future, the implementation of blockchain may also raise questions related to the regulation of social and environmental accounting that becomes possible with this technology. All this will help to improve transparency further and decrease information asymmetry in the market. Other authors have also proposed different ways of applying blockchain technology in accounting and auditing (e.g. Yu et al., 2018; Kokina et al., 2017; Faccia and Mosteanu, 2019; Bonsón and Bednárová, 2019), without offering a comprehensive overview. Similarly, Bonsón and Bednárová (2019, p. 737) conclude that “blockchain is an under-explored phenomenon, and future research is necessary to obtain a full understanding of this emerging technology and its implications for the accounting and auditing sphere”.
As mentioned in the methodology, we checked the validity and reliability of the topic results using citation analysis (Dumay et al., 2018). Table 3 shows the total citation counts for the top 10 articles as listed in Google Scholar citations (5 March 2021). 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. 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.
Regulation
In Section 2, we discuss the concept of blockchain as an accounting technology. Section 3 outlines the methodology used for the review, followed by the results in Section 4. The most representative articles are analysed in Section 5, with future research directions discussed in Section 6. Section 7 concludes the paper with the implications of this research for theory, practice and policy, along with the limitations of the study.
Although the technology is rapidly evolving and will likely have an impact on accounting and auditing, some skepticism is warranted regarding potential benefits and ease of implementation. For now, the benefits are likely being oversold, while the costs and difficulty of implementation are likely being undersold. Unless existing processes and systems are truly scrutinised for their potential to benefit from blockchain technology, the full range of opportunities that blockchain presents will not be realised. Blockchain will only become a “game-changer” if all parties involved in the accounting ecosystem are open to its potential. We agree that blockchain will impact how accounting information is recorded, but we do not expect that accounting functions will disappear. Rather, accountants will likely retain some old functions, either as-is or modified to suit the new paradigm, and find they have an entirely new set of responsibilities, some of which will require them to develop new skills.
Blockchain technology will reduce the need to follow paper trails as the blockchain would be enough to prove many parts of a traditional audit. There are three key aspects of blockchain that can affect the accounting industry. Blockchain is still relatively new, with the development of software being rather dynamic; however, figure 6 lists and briefly describes some of the products in the marketplace that attempt to integrate blockchain technology. 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. (2017), “Toward blockchain-based accounting and assurance”, Journal of Information Systems, Vol.