Distributive technologies are changing the business world as we know it. Blockchain technology (BT) is one of the most significant disruptive technologies nowadays (Parmoodeh et al., 2023; Perera and Abeygunasekera, 2022). BT gained popularity after its inception in 2008 as the underlying technology supporting cryptocurrencies such as Bitcoin (Alarcon and Ng, 2018).
- Reducing the lag time between when the information is requested and when it produced, in and of itself, will immediately be accretive to the performance of the firm.
- It will be important to monitor the progress in the take-up of blockchain in the future (Bonsón et al., 2019; Gietzmann and Grossetti, 2019; Bonsón and Bednárová, 2019).
- Audit firms are encouraged to benefit from these insights because audit firms that will conduct effective audits for blockchain-based accounting systems will have a competitive advantage in this newly blockchain-based accounting market.
- Regarding taxation, cryptocurrencies should be VAT exempt, and when they are directly taxed, transactions should be treated as production events for miners or as exchanges of foreign currencies in all other situations.
Table 9 shows the top ten rankings of the number of citations from other articles. Several authors combine blockchain with auditing and control systems, applying it to different business functions. In total, four articles—two from 2019 (Chang et al., 2019; O’Leary, 2019), one from 2018 (Wang and Kogan, 2018) and one from 2017 (Kokina et al., 2017)—are remarkably significant in terms of the number of citations received over several years and the ranking obtained. This indicates that the papers provide high-quality information on accounting, auditing and accountability and blockchain. The publications do not present a relevant grouping in a single journal.
The impact of blockchain technology on audit
They will need to consider how to tailor audit procedures to take advantage of blockchain benefits as well as address incremental risks. Finally, auditors agree that BT is a significant technology disruption in the accounting and auditing profession nowadays. However, small and medium-sized audit firms fear that reconciliation automation will put the accounting and auditing profession at risk than large-sized audit firms. Probably because the available technological and professional resources to enable them to compete in the blockchain-based accounting environment are less than large-sized audit firms, which might lead to erosion of their prospective client base.
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. Digital technology has long influenced accounting, but most digital technology has involved replacing analog tools with similar digital counterparts. However, blockchain, a relatively new technology, is poised to change how accounting is done on a more fundamental level.
There are significant differences between large-sized audit firms and small and medium-sized audit firms in terms of the benefits of BT to the audit process. Dr. Sean Stein Smith DBA, CMA, CPA, CGMA, CFE is an Assistant Professor at Lehman College (CUNY). Prior to his current role, Sean worked for several private sector organizations, both in the for profit and non-profit sectors, where he played key roles in technology upgrades, reporting improvements, and change management.
But going forward, it will be even more critical for the profession to be involved in the conversation. Although the middle man slows down transactions and adds fees for their services, they’re not all bad. The middle man plays a large role in protecting both parties in the exchange of assets from fraud.
This subsection analyses the research method used by authors in the selected pools of papers. As DiCicco-Bloom and Crabtree (2006), Miller and Crabtree (1994), Polkinghorne (1995) and Qu and Dumay (2011) indicate, this trend is confirmed by increasing pressure on the quality sphere implying further ramifications. For example, 35% of studies are discursive analyses; 23% establish a blockchain-based model for accounting and budgeting actors; 14% belong to the retained earnings definition residual category of other qualitative studies and 12% are literature reviews. Free and Hecimovic (2021) outline the situation of the post-COVID-19 supply chain. Among the research agendas, an interest in new blockchain-related studies emerges. Finally, albeit in a different scope, Kotb et al.’s (2020) structured literature review examines research related to artificial intelligence (AI), paving the way for an open discussion on the effects of technology.
2 Defining a set of articles for further analysis
A GL includes all the assets, liabilities, equity, expense, and income ledgers, which make up a complete set of the financial transactions records. To make sure a GL is accurate, you’d use a double-entry accounting system. 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.
There are significant differences between large-sized audit firms and small and medium-sized audit firms in terms of barriers to adopting BT in the Egyptian business environment. First, there are few studies about the accountants’ awareness and utilization of BT to prepare and attest financial information. Second, there are few studies about BT’s impact on Egypt’s accounting ecosystem. Third, BT is expected to have significant shifts in the accounting paradigm and practice; many countries have developed strategies and started to adopt BT in accounting practices.
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. Therefore, blockchain projects for accounting and auditing need clarity in regulatory terms (Cai, 2018, 2021; Carlin, 2019; Tan and Low, 2019). New technologies and digital innovations are gradually reshaping the contours of accounting, auditing and reporting (Bonsón and Bednárová, 2019; Dai and Vasarhelyi, 2017; Lombardi and Secundo, 2020; Mancini et al., 2021; Marrone and Hazelton, 2019). Among the emerging technologies able to revolutionize business models and consequently change the processes underlying management control, accounting, auditing and reporting is blockchain (Schmitz and Leoni, 2019). A blockchain is a distributed digital ledger shared by several peers in a network that facilitates transaction recording and property tracking for tangible and intangible assets.
Blockchain, AI, and Accounting
Finally, the last strand looks at companies’ reporting capabilities and new tools that can be used for financial and nonfinancial communication. 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”. Blockchain is not yet a mainstream accounting topic, and most of the current literature is normative. The four most commonly discussed areas of blockchain include the changing role of accountants; new challenges for auditors; opportunities and challenges of blockchain technology application; and the regulation of cryptoassets.
The accounting profession may require a shift in skills, with an emphasis on technology, advisory and value-adding activities rather than reconciliation and provenance assurance. Auditors will need to focus on how blockchain transactions are recorded and recognized in financial statements in addition to how critical elements like valuations are determined. While a deep technical understanding of blockchain may not be necessary for accountants, it will be important to grasp its principles and functions as well as advise clients on adoption and its impact. Furthermore, in the long term, there is a strong potential for an accountant to be an intermediary between experts in blockchain technology, artificial intelligence (AI) and machine learning (ML) in order to form a symbiotic system to analyze and advise client data proactively. Additionally, no past papers offer a bibliometric with in-depth coding analysis based on the evidence, aims and future research ideas of the previous literature.
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. (2019), “Establishing the representational faithfulness of financial accounting information using multiparty security, network analysis and a blockchain”, International Journal of Accounting Information Systems, Vol. Blockchain could have use cases and drive innovation in many sectors, such as those of banking, financial markets, retail, supply chains, healthcare, manufacturing, governance and insurance (Gaur, 2020).
Furthermore, as Paul and Criado (2020) indicate, reviews should aim to launch new ideas, theories, measures, methods and RQs. In this sense, code analysis allows us to discover new variables and better highlight possible future research journeys. First, implementing bibliometric analysis makes it possible to derive useful information such as time period, documents’ information, sources, authors, keywords, citations and countries. Therefore, based on the results obtained and from the theory, we created the first category of nodes similar to Guthrie et al. (2012), Massaro et al. (2015) and Secinaro et al. (2020).