Blockchain in accounting practice and research: systematic literature review
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. You may have heard the term “blockchain accounting” but wondered exactly what it entails, and how it differs from the standard, generally-accepted accounting principles used by bookkeepers and accountants in most businesses. The examination involves the utilization of quantitative evidence and theoretical explanations to uncover intricate patterns and identify areas that warrant further investigation. The broader adoption of blockchain technology faces certain barriers that need to be addressed.
O’Leary (2017) also suggests applications, including accounting, auditing, supply chain and other transaction information types. Dai and Casarhelyi’s (2017) influence, with that of Moll (Moll and Yigitbasioglu, 2019), Schmitz (Schmitz and Leoni, 2019), 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.
Wang and Kogan (2018) extend the aim of Dai and Vasarhelyi (2017) to solve the trade-off between confidentiality and transparency and propose the use of zk-SNARK (zero-knowledge verification) schemes and homomorphic encryption. In this way, the data stored in a blockchain can be validated and summed without revealing any details. McCallig et al. (2019) propose a blockchain system that overcomes the privacy issues the use of multiparty security and modular arithmetic. However, their system requires communication between all involved entity customers or suppliers. The most frequently cited paper in this area is that of Dai and Vasarhelyi (2017), which entered triple-entry bookkeeping into the academic discussion on blockchain and accounting. Their idea comes from Grigg (2005), who proposed a third entry recorded by a trusted third party that stores a receipt to which both parties involved in a transaction agree and digitally sign.
- Users control the addition of millions of transactions trying to post a sync at once by grouping these into blocks and adding blocks one at a time, in sequence.
- Transactions take time to process and cost money; they are not validated by all parties due to limited network participation, and they are prone to error and vulnerable to hacking.
- It also saves businesses a lot of time from having to deal with fraud or trying to collect money from dishonest organizations.
- However, the complex nature of attribute relationships necessitates a deeper understanding of situational complexities.
- Although there is beneficial interest motivated by the possible reduction of costs in the accounting, auditing and accountability field, many elements still need clarification.
(2018), “Auditing with smart contracts”, International Journal of Digital Accounting Research, Vol. (2017), “Toward blockchain-based accounting and assurance”, Journal of Information Systems, Vol. 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.
In this area, researchers study how to apply blockchain to accounting and design data flows and architectural features. Auditors could extend their services to work as accounting blockchain information systems administrators or advisors (Bonyuet, 2020). Auditing procedures and standards will need to keep pace with the new IT environment (Gauthier and Brender, 2021), as new accounting systems will be subject to control testing (Sheldon, 2019). The parts of accounting concerned with transactional assurance and carrying out transfer of property rights will be transformed by blockchain and smart contract approaches. This could threaten the work of accountants in those areas, while adding strength to those focused on providing value elsewhere.
What Does it Mean for the Accounting Profession?
It is essential to start making the changes now as current students will soon become accounting and auditing practitioners as well as managers working with blockchain and other disruptive technologies. Analysis of recent studies reveals the swift progress of scientific knowledge across diverse disciplines and the integration of research outcomes within various markets and industries [37–41]. Chinese researchers, in particular, have exhibited a notable interest in the practical implementation of diverse scientific disciplines across different domains [42–46].
3. Contextual challenges in developing countries
Initially developed to serve the establishment of Bitcoin, major corporations and the AICPA believe that blockchain’s independence, verifiability and distributed ledger methods have the potential to transform international business and economic growth. Blockchain is seen as a disruptive technology, in which accounting and bookkeeping jobs are anticipated to change greatly over the next few years. Currently in the development stages, more than 30 major companies are offering blockchain solutions for businesses in the United States and around the world. The primary objective of this research was to examine the factors that drive and hinder the adoption of emerging blockchain and cloud-based technologies for sustainability accounting in Chinese businesses. This study aimed to contribute empirically and theoretically by addressing existing gaps in knowledge through a thorough mixed-methods investigation within China’s evolving context. Hence, achieving technical and organizational transformation requires long-term commitments from multiple stakeholders.
One of the first popular blockchain applications was that it cut out the middle man when transferring money. For example, you can send money peer-to-peer (P2P) without having to go through a credit card processor or bank. And in mother of accounting some ways even the, you know, the bitcoin drop was probably a good thing overall for the marketplace. Because you want to get the speculators out, and you want to see what value bitcoin can provide to its different use cases.
In this post, we’ll focus our attention on how blockchain affects the accounting industry and what impacts this technology can have on your small business finances. As blockchain technology continues to advance and new and different uses are found, it will be up to the accountancy profession to ensure that its promises of transparency and accountability are fulfilled. Technical challenges and research opportunities”, Decision Sciences, Blackwell Publishing, Vol. Second, in terms of authors, O’Leary DE, Vasarhelyi MA and Cai CW are the leading authors. They promptly launch this research stream with in-depth analysis focusing on applications such as triple-entry systems and automated auditing networks.
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).