This has made blockchain accounting a hot topic, especially for those in the accounting profession. Schools and big accounting firms like Deloitte are already educating on blockchain accounting. The net effect of this rapidly increased usage of blockchain in financial transactions has created a huge demand for interpreting and understanding tax effects of blockchain-related transactions. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities.
Even if they are recorded onto blockchains, transactions may still be fraudulent, illegal or unauthorised. Hence, given the need for auditors to detect and investigate transaction errors or fraud, the argument of auditors becoming obsolescent is not evident. Matter of fact, one of the things that we’re really proud of was the work we did with AICPA and CPA.com on our stablecoin primer for the accounting professional. To help the accounting profession understand, what’s a commodity token pegged to a barrel of oil?
Blockchain in accounting research: current trends and emerging topics
They only identify the current state of the field, and they only offer pathways for future research directions at a particular point in time. The challenges of blockchain regarding sustainability and environmental issues should also be a focus in future research. On the one hand, a distributed carbon ledger system based on blockchain technology will not only strengthen the corporate accounting system for carbon asset management but also will fit within existing market-based emissions trading schemes (Tang and Tang, 2019).
Decentralized, Distributed Ledger Technology
- Or it could hack the email systemof a supplier and use it to send invoices and bankdetails to the victim organizations.
- As shown, all but one of the ten most-cited articles were published in ranked accounting journals.
- This reduces risks for all parties who use blockchain technology for accounting purposes.
- And when you begin to watch produce and different industry verticals leveraging blockchain technology in production today, all those firms leverage participants in the accounting profession.
- When conducting an SLR, it is important to assemble a proper body of literature so as not to bias the results (Massaro et al., 2016).
- Rather, we see it evolving into a new role within companies and the ecosystem of blockchain accounting.
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 batch level activity 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.
Another accounting aspect that blockchain haschanged is related to the delivery of goods andservices to customers. The receipt of goods andservices can now be confirmed by customers directlyby verifying the delivery transaction in the blockchain.In addition, the execution of contracts with supplierscan be completed using smart contracts in theblockchain. This execution is done according to theterms and conditions of the contract embedded inthe code of the smart contract in the blockchain. In accounting, blockchain technology can offerorganizations more verifiable transactions withbanks, customers and even internal parties.4This kind of verification can also be useful to external andinternal auditors when they trace transactions toverify their authenticity. A GL includes all the assets, liabilities, equity, expense, and income ledgers, which make up a complete set lease accounting for escalating rent payments or rent holidays of the financial transactions records.
How Blockchain in Accounting Can Help Business Owners
So that’s probably one of the things that is a very, very current topic. Some in our audience may think that blockchain has been in a bit of a lull. I mean, there was a ton of hype about how it was going to change everything and, you know, change wasn’t instantaneous. The blockchain has gone from the peak of inflated expectations down to the trough of disillusionment. But it’s maturing, and it may be changing very quickly what what are the purpose of a post closing trial balance you hear, thanks in part to a decision or a release recently by the IRS.
A smart contract is a code that reflectsthe terms and conditions of a contract between theentity and the supplier and executes itself without anyhuman intervention. For operational audits, internalauditors may review the flow of procedures bytracing all internal transactions in the blockchain thatoccurred during a specific period and ensuring thatall objectives were met. In addition, internal auditorsmay test for governance issues in the blockchain byverifying who is responsible for creating transactions,who can verify transactions, and which party isresponsible for reviewing transactions. Second, other machine learning techniques could be applied while working with the corpus of literature.