Basics of blockchain technology and use cases Tax Pro Center Intuit

The second idea, which refers to accounting blockchain, is that of Grigg (2005). Furthermore, a blockchain accounting system that is integrated with smart contracts “can self-execute or self-enforce the agreements signed by two parties” (Cai, 2021, p. 9). We believe it is urgent to fill this gap with systematic insights into the potential of and challenges facing blockchain technologies in accounting practice and research. There are still many unknowns with respect to how blockchain will impact the audit and assurance profession, including the speed with which it will do so. Blockchain is already impacting CPA auditors of those organizations using blockchain to record transactions and the rate of adoption is expected to continue to increase. However, in the immediate future, blockchain technology will not replace financial reporting and financial statement auditing.

  • Therefore, businesses should make embracing its transformative capabilities a priority.
  • First, implementing bibliometric analysis makes it possible to derive useful information such as time period, documents’ information, sources, authors, keywords, citations and countries.
  • 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.
  • 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.
  • But several companies, the most prominent of which is Web3 services platform Chainlink, have been developing software that connects blockchains with external data.

Blockchain, via its nature of securing and time stamping information as it is produced and verified by a decentralized network, can help track data and goods as they move (physically or digitally) through supply chains and organizations. Establishing a stronger foundation for this non-financial information in turn allows for a more rigorous analysis, conversation, and reporting process to take shape. In terms of literature reviews published in other sources, some consider this field using different lenses and focus. From 2013 to 2018, they highlight the relevance of Bitcoin and cryptocurrencies. In the realm of auditing, future research could explore how different types of blockchain (public, private and permissioned) could be used in accounting and Audit 4.0 to improve the quality of the data collected (Dai et al., 2019).

How Could Blockchain Change Business and Economic Activities?

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. Moreover, Australian journals such as the Australian Accounting Review and Meditari Accounting Research are among the top tiers of those who welcome such research. 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), Kwilinski (Kwilinski (2019), lay the foundations for Wang and Kogan (2018) and (Carlin, 2019).

Since blockchain is just such an emerging topic in the accounting literature (Schmitz and Leoni, 2019; Bonsón and Bednárová, 2019; Yu et al., 2018), we decided to add papers not yet published in the accounting journals but uploaded to the SSRN. SSRN is the leading social science and humanities repository and online community that provides “tomorrow’s research today” (Gordon, 2016). With more than 950,000 papers from over half a million authors in the e-library, SSRN offers an extensive pool of research ideas that can be tracked before publication to detect emerging research topics and current trends. 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. These were excluded, plus we also excluded any of the papers that had subsequently been published in a non-accounting journal or an accounting journal not ranked by ABS or ABDC.

Additionally, the pink lines linking countries indicate the extent of collaboration among the authors. It is interesting to see which countries have the most publications on accounting, auditing, accountability and blockchain. Zemánková (2019)’s analysis reviews the literature on blockchain and AI in accounting, focusing on smart contracts and smart audit procedures, highlighting current applications and tools developed by practitioners.

Contrary to other studies, our SLR was updated at the beginning of 2022; therefore, it includes the most recent literature reviews published on the topic. However, especially in light of other SLRs on similar topics, we see an opportunity to perform future in-depth analyses to test new methods, including empirical and quantitative methods. It’s immutability and decentralized nature make it unique, but its function of recording transactions makes it familiar to those in the accountancy profession.

We used a thesaurus file to merge similar keywords (e.g. “audit” and “auditing,” “cryptocurrencies” and “cryptocurrency”). The keywords were grouped into clusters, namely, sets of closely related nodes within a bibliometric network. To create this form of bibliometric network visualization, VOSviewer uses colors to indicate the cluster to which each node has been assigned what is suspense account in insurance considering the cooccurrence relations. The clustering technique used by VOSviewer is discussed by Waltman et al. (2010). The weight of a node is based on the number of occurrences of the corresponding keyword. The key feature in blockchain is that anything that is stored on the blockchain is there forever, the information is immutable and cannot be erased.

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. Blockchain technology enables financial, property and value chain transactions worldwide.

Corporate governance

Thus, our final sample comprised 153 papers on blockchain for accounting. Against this background, the present study is timely, as it aims to review the existing literature on the use of blockchain in accounting practice and research and to define potential opportunities for further investigation. Accounting With Blockchain
Using blockchain technology allows users to integrate accounting into business activities rather than separate accounting from business activities.

Finance in a Digital World

We read and analyzed each item, and we present the key aspects of our analysis adopting a narrative approach and discussing them by topic. Figure 2 represents our steps using a PRISMA diagram (Page et al., 2021), which we adjusted to enhance its fit for a qualitative systematic review. The PRISMA flow diagram depicts the flow of information through the different phases of a systematic review. It maps the number of records identified, included and excluded and the reasons for exclusions.

Hence, accountants will still need to be involved in the process (Cai, 2018). Thus, many of the benefits and challenges of blockchain for auditing still need to be analysed. As discussed in Section 5.1, most papers on the changing role of accountants are normative. They talk mainly about various assumptions over how blockchain may influence accounting. One of the main changes frequently discussed is how blockchain will change the way accountants collect information.

The Impact of Blockchain Technology on Accounting and Auditing

Valerio Brescia is a researcher at the Department of Management at the University of Turin. PhD in Business and Management at the same university, his main research interest deals with the consolidated financial statements of the municipality, accounting standards and popular financial reporting. 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.

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And in 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. Just for the audience if anyone owns bitcoins, they’re all, is built off of a blockchain database, just like the stablecoins are. 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.

2 New challenges for auditors

Blockchain’s decentralized nature also helps act as proof that a transaction happened. There are others who argue that all industries use a lot of energy, and that it’s unfair to single out bitcoin. It has been pointed out that ATMs and data centers of traditional banks consumes a lot more energy than bitcoin. The Court of Justice of the European Union (2015) decided that exchanges of cryptocurrencies are VAT exempt under the provision that exempts means of payment. The IRS (2014) of the USA declared that virtual currencies must be treated as property.

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