Besides, 41% of the sources point to practical implications for the research carried out. Moreover, on the practical implications, several results show that blockchain can increase financial visibility by enabling timely action in corporate accounting (Moll and Yigitbasioglu, 2019), questioning the existence of the figures of accountants and auditors (Tiberius and Hirth, 2019). Finally, on policy implications, the authors dwell on the public nature of corporate accounting transactions, aimed at the correct payment of each country’s taxation.
- To create this form of bibliometric network visualization, VOSviewer uses colors to indicate the cluster to which each node has been assigned considering the cooccurrence relations.
- Therefore, the issue of accountability based on blockchain represents a tremendous opportunity for future research.
- 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 blue shaded areas on the map represent research cooperation among nations.
They only identify the current state of the field, and they only offer pathways for future research directions at a particular point in time. Our analysis reveals that more than two-thirds of the papers under review were published in journals, while less than a third represent works in progress uploaded to SSRN. The top accounting journals from the ABS and ABDC rankings appear to be resistant to the blockchain field of research, as https://capitalprof.space/ they have published only a few papers 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.
From this perspective, it is essential that blockchain solutions are integrated into ERP systems and with RFID, IoT and AI technologies to create fast, reliable and repeatable processes. If blockchains integrate information and processes within and across company boundaries and are in synergy with emerging technologies, then it will be possible to simplify and accelerate business processes, increase cybersecurity protection and reduce or eliminate the roles of intermediaries. Moreover, some of the relevant minor issues are related to latency, scalability and energy consumption (O’Leary, 2019).
Finally, verifiability is reconciled with the theoretical component of auditing, which requires audit committees to check corporate effectiveness measures frequently (Bédard and Gendron, 2010). Figure 6 presents a topic dendrogram which, according to Silva et al. (2016), allows the visualization of a search flow in a single image, creating clusters with keywords and providing interest insights. In addition, the structure of the graph allows for hierarchical clustering analysis by considering the height of the nodes. Particularly, the lower the node height, the more similar the clusters will be to each other.
The public set represents virtually irrefutable evidence of the underlying transactions. It is important to note that organizations can control access to the data, both in terms of who can access the data and what data can be accessed. 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.
Additionally, Arnaboldi et al.’s (2017) contribution stimulates the conversation between academics and accountants considering business processes and digital interactions identifying, for example, the role of big data information and decision-making processes. So I actually think we’re in a good state, and I think this is excellent that we can, the firms can start working on this initial use case in a much broader way. There’s been firms doing work in the cryptoasset category, but now this is going to make it much wider spread. And I think as they understand how to meet the compliance needs related to cryptotax, they’re going to get a better understanding of cryptoassets, the blockchain category.
- Stakeholder reporting requires increased scrutiny of the information produced and analyzed by management professionals, and blockchain is an important tool for accountants to become full-fledged data experts.
- For example, artificial intelligence (AI) can drive down the cost of health care by more accurately determining correct drug dosages for patients and potentially reducing errors.
- 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.
- We chose PRISMA over other existing protocols because of its comprehensiveness, its use in several disciplines worldwide and its potential to increase consistency across reviews (Liberati et al., 2009; Pahlevan-Sharif et al., 2019).
- Therefore, blockchain may help accountants move away “from traditional accounting assumptions, such as monetary unit[s], economic entit[ies] and time periods, leading organisations more towards holistic views of their relations with the society” (McGuigan and Ghio, 2019, p. 800).
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. Finally, we aim to explain what definitions of accounting theory are most used.
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Most (93%) of the extracted documents do not consider further relationships with other technologies, and 2% also identify AI as the technology of interest, with 1% focusing on big data and machine learning. For instance, Moll and Yigitbasioglu (2019) and Zemánková (2019) state the use of algorithms could provide efficiency by reducing repetitive action for accountants and auditors. In this sense, Tan and Low (2019) suggest that accountants obtain new skills to manage and understand technology needs. Furthermore, Fuller and Markelevich (2020) focus on the scalability of blockchain at an acceptable cost in accounting and auditing by fixing business applications to the accounting model.
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In the past, we’d use paper receipts for proof that a transaction occurred. With the introduction of digital payments came digital receipts, which are easier to tamper. Blockchain’s decentralized nature also helps act as proof that a transaction happened. Our Blockchain & Digital Assets Solutions team are ready to help your business trailblaze in this space. Reach out to start a conversation, no matter where you are on your journey. What is clear about the potential disruption this new wave of technologies may bring to centuries-old industries is that it is not just a disruption that will force adaptation; it is also a new opportunity for transforming industries so they are more resilient, effective, and valuable.
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So, while anyone can look at a blockchain spreadsheet, in order to edit it (typically to enter a transaction) you need to have the exact code (sometimes called a key) and you must be entering a change that makes sense in the context of the rest of the spreadsheet. It is no small secret that accounting is the midst of a radical transformation and evolution. Forces include, but certainly are not limited to, globalization, digitization, and a growing amount of technological integration into business operations continue to have ramifications for the industry and accountants.
6 Blockchain characteristics
Two critiques of traditional financial reporting are that commonly cite are that financial or operational reports are backward looking and only relevant for a small number of recipients, and the process of producing a comprehensive report can take months. Artificial intelligence has the potential to address these issues in a systemic and comprehensive https://capitalprof.team/ manner if accountants are flexible enough to adopt these tools. Drilling back down to real world applications, however, provides an example of how these implications are already influencing accounting at large. Second, the focus on the sustainability of blockchain-related business models in accounting and auditing is not yet developed.
Blockchain-based accounting systems pose limitations regarding processing speed and transaction volume. As an auditor, it is crucial to consider the scalability limitations of such systems and carefully assess their capacity to handle increasing data volumes without compromising efficiency. Striking a balance between innovation and practicality is essential to ensure blockchain-based accounting systems can effectively support the demands of a growing and dynamic business environment. There are significant differences between large-sized audit firms and small and medium-sized audit firms in terms of the capabilities required for effective auditing of Blockchain-based accounting systems. 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 study’s results conform with the institutional theory, i.e. how organizational decisions are influenced by the institutional environment’s norms and values. The results provide insights into how institutional pressures shape audit firms’ perceptions of can you claim your dog on your taxes. The findings also show that there are specific capabilities that the audit firm must have to audit blockchain-based accounting systems effectively. In addition, non-big-sized audit firms place higher importance on data protection, security measures, compliance with audit regulations about BT and integrating blockchain-based accounting in the audit process as the antecedents for effective auditing.
They bring together authors who currently appear to support blockchain and others who consider the technology harmful to accounting and auditing work. Starting from reports by professionals and literature, they focus limitedly on governance, transparency and trust, continuous audits, smart contracts and accountants and auditors’ roles in the emerging blockchain ecosystem. Each of the papers on this topic discusses ideas about how the role of accountants and accounting treatments would change if/when blockchain becomes a mainstream technology. 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).