Our deep business acumen and global industry-leading Audit & Assurance, Consulting, Tax, and Risk and Financial Advisory services help organizations across industries achieve their various blockchain aspirations. Reconciliation of accounting data will not be fully automated through blockchain technology as auditors’ professional expertise and experience is required to assess the accuracy of complex accounting transactions. However, the ability to trust that both parties are recording the same base transaction information and the real-time availability what are audit assertions and why they are important of this accounting data offers immense benefits for the efficiency with which accounting data can be reconciled and analyzed. Due to distributed ledger technology, blockchain technology eliminates the need for entering accounting information into multiple databases and potentially removes the need for auditors to reconcile disparate ledgers. This could save substantial amounts of time and the risk of human error may be considerably reduced. Among the possible developments of this study in terms of the practical and theoretical applications of blockchain technology to accounting, we mention the possibility of overcoming the problem of data privacy through the use of public blockchains.

Accounting and auditing with blockchain technology and artificial Intelligence: A literature review

1. A blockchain-based supply chain process could facilitate instant tracking, preserve privacy through a private chain with preauthorization, reduce costs related to updating information, enable automatic payments and, in general, improve automation (Chang et al., 2019).
2. The findings of this chapter can be used by the key stakeholders involved in professional practice in the accounting and auditing domain.
3. As blockchain is a new technology, the first research area aims to discover which accounting and auditing problems blockchain can solve and whether accountants see it as an opportunity to leverage their capabilities or a threat that can make their job obsolete.
4. However, cryptocurrencies do not meet the financial asset definition provided by IAS32 (Procházka, 2018; Morozova et al., 2020).
5. From an accounting perspective, cryptocurrencies fulfill the asset definition given by the conceptual framework of international financial reporting standards (IFRS) (Morozova et al., 2020; Ram et al., 2016).

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 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. First, this SLR provides a clear picture of the state of the accounting research on blockchain using bibliographic and narrative analyses.

The impact of blockchain technology on audit

Table 2 provides some quantitative data (total citation and CPY) regarding the studies with the highest impact on this topic. Figure 1 shows the distribution over time of the included research products. The green line represents all 127 research products that belong to the “Accounting and Auditing” topic. The yellow line depicts articles published in journals ranked as “ACCOUNT” by the ABS AJG2021 journal ranking. Figure 1 shows a considerable increase in interest since 2016, in which year accountants and practitioners began to seriously consider blockchain as an accounting tool (Kokina et al., 2017). As blockchains allow recording and settlement of transactions to occur at the same time as the transaction itself, auditors can obtain data in real-time and in a consistent, recurring format.

However, while physical money (cash) is accessible to anyone, virtual central bank money is restricted to a few financial intermediaries. Berentsen and Schär (2018) suggest that central banks should not create new cryptocurrencies but should allow anyone to open an account with them. Calderón and Stratopoulos (2020) show how the blockchain of the Listerine® supply chain works; this product is a mouthwash produced by J&J, a multinational pharmaceutical company. Listerine managers use blockchain to assure the provenance of input and to facilitate better coordination and trust between members. Notably, although every peer maintains a copy of the chain (hence, it is decentralized), it also entails an element of centralization because of its identity provider and ordering node. A promising accounting context in which blockchain could quickly become part of the status quo is sustainability reporting because there is a need to improve the transparency and assurance of the information that entities disclose to prevent green-washing policies and practices (Bakarich et al., 2020).

Some research products have used general frameworks such as the technology–organization–environment framework (Dai and Vasarhelyi, 2017) and the unified theory of acceptance and use of technology (Ferri et al., 2020). Many others do not refer to a theoretical framework in their analysis of this phenomenon because they provide general overviews of the possible uses, benefits and limitations of blockchain in the context of accounting (Pimentel and Boulianne, 2020). It’s clear that 9 directories your small business needs to be listed on technology is changing the way organizations do business across all functions and industries. But there are particular pairings of tool and team that carry game-changing potential.

Applications of Blockchain in Financial Accounting

Learn how our auditors work with Deloitte COINIA to help address blockchain. This effectively means that Person A has a copy of all of their information as does Person B, and as does the next person. In a decentralized environment, all participants have access to the same information and users can then choose to share it or not. Information will no longer need to be aggregated and stored in central databases as it will be stored everywhere at once and, if desired, under direct user control rather than the company offering the service.

Gabriella Kusz was a principal, Strategic Initiatives, at IFAC where she supported accountancy’s leadership and innovation in the digital era. Van Hoek (2019) notes that a need for transparency and visibility motivates blockchain implementation and that the main barrier facing such an implementation is a lack of understanding of how to integrate and leverage blockchain investments. 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. Accounting for cryptocurrencies as cash falls under IAS21 “The Effects of Changes in Foreign Exchange Rates” if one adopts a broad definition of cash that goes beyond legal tender status (Procházka, 2018; Hampl and Gyönyörová, 2021).

How Blockchain Is Transforming Accounting, Auditing and Finance: A Systematic Review

First, this SLR provides a clear picture of the state of 6 3 receivables intermediate financial accounting 1 accounting research on blockchain. The engagement of academics and practitioners with the potential of blockchain and technological advancements is growing but limited (Schmitz and Leoni, 2019). At this crucial moment for the distribution and development of blockchain technology – when large companies, institutions and major audit firms have already become convinced adopters (EY, 2020; PwC, 2020) – our study provides an up-to-date, comprehensive SLR of 346 research products indexed on Scopus.

Therefore, the issue of accountability based on blockchain represents a tremendous opportunity for future research. The success of cryptocurrencies has enticed entrepreneurs, academics and practitioners to study their innovative underlying technology, the blockchain and its opportunities in many different sectors. Hence, blockchain became a tool to innovate and could disrupt and create new business models.