In this section, we explore the fundamental characteristics and operational aspects of blockchain technology, drawing insights from existing scholarly literature. Even if you’re not using cryptocurrency, blockchain accounting can involve US dollars and other assets. Plus, understanding the basics of blockchain will help you follow future updates and be more prepared. Then when the time comes that blockchain technology directly impacts your business, you’ll be ready. The adoption of blockchain technology along with artificial intelligence technologies and, more specifically, machine learning is happening at a fast rate.
In contrast, a public distributed ledger does not require permission to participate in the network. As blockchain technology continues to advance and new and different uses are found, it will be up to the accountancy profession to ensure that its promises of transparency and accountability are fulfilled. Auditing requires the confirmation of transactions and balances on firms’ accounting ledgers at the end of the reporting period due to time-lags, reconciliations, and accounting entries. 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).
Continuing Professional Development (CPD)
This section provides an overview of the research methodology employed in this study, which aims to examine the factors influencing the adoption of blockchain and cloud-based technologies for sustainability accounting among Chinese businesses. The existing literature highlights several research gaps in the field, including the lack of integrated conceptual models that simultaneously consider attribute interdependencies. Additionally, there is a need for comprehensive mixed-methods analyses to examine the uptake of blockchain and cloud computing.
- Policies should emphasize the importance of legitimate operations aligned with stakeholder expectations, promoting sustained profitability and aligning interests [83, 221–223].
- Even if organizations or people involved in business transactions do not trust each other, they will be able to trust the information in the blockchain.
- Nevertheless, Pitt et al. [208] suggested that different types of stakeholders have varying effects on collaborative efforts in alternative energy projects.
- A blockchain is a distributed, peer-to-peer database that hosts a continuously growing number of transactions.
- The results of Table 4 allow us to confirm our choice of the topics for further analysis.
Continuous guidance should be provided to incorporate evolving understandings of materiality. Standardization efforts should be approached cautiously to accommodate varying rates of innovation, while also preserving competitive advantages [69, 146, 219]. To enhance construct validity, the findings from different sources are integrated through constant comparison. This process allows for a comprehensive understanding of the research topic by examining similarities and differences across various cases [172]. Considering the lack of established theories specifically tailored to the Chinese context, an inductive exploration approach is adopted instead of deducing hypotheses. The aim is to develop contextualized frameworks based on empirical observations and insights obtained from the research.
Blockchain: Impact on Business, Finance and Accounting
There’s always a trade-off with new technologies, and blockchains are no exception. Here are a few reasons why blockchains are disadvantageous for accounting processes. Timestamped data is the perfect ingredient for a historical look at transactions in an audit to check for unusual events.
Why a career in chartered accountancy?
Finally, because cryptos fulfill the asset definition but are not tangible or a type of asset included within the scope of principles other than IAS38, they can be considered intangible assets. Thus, cryptos fall under the accounting rules for “Intangible assets with indefinite useful lives” (IAS 38.107), so they cannot be amortized but only impaired. Furthermore, if an active market exists, then intangible assets can be valued at fair value (IAS 38.75) (Procházka, 2018; Morozova et al., 2020; Beigman et al., 2021).
Advantages and Disadvantages of Blockchain in Accounting
This practice will be mandatory over time as a 5 billion VAT gap in Europe needs to be patched. VISMA prides itself as a highly innovative organisation that strives to be at the forefront of adopting new technologies. VISMA | yuki eminently has always been at the forefront of robotic accounting and applying new machine-learning techniques to enhance maintaining bookkeeping. Businesses from every industry are exploring new opportunities and solutions possible with Ethereum. This is a big advantage over a centralized accounting database that requires maintenance shutdowns, occasionally causing a break in operations. This degree of automation allows organizations to set different control levels for staff members, which can then be used to distribute workloads across cross-functional teams.
Distributed ledgers may not be attractive or even needed by every company, so there is a real need to ascertain exactly what the up and downsides of implementing blockchain are. As O’Leary (2019) observes, the opportunities for using blockchain may be limited by the desire and ability of all agents in the ecosystem to implement it. 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 corpus comprised 153 academic papers from two ranked journal lists, the Association of Business Schools (ABS) and the Australian Business Deans Council (ABDC), and from the Social Science Research Network (SSRN). From this, the authors analysed and critiqued the current and future research trends in the four most predominant topics of research in blockchain for accounting.
Native currency for cost accounting
Implementing a global storage layer that establishes a paper trail of online activity poses a viable alternative strategy. The solution is to have a fully digitised version of every invoice, always available globally, without going through a trusted institution to view it, and digitally sign it by a legal entity for ensured authenticity. Not having a secure exchange medium for invoices opens the door to fraud and drastically inhibits automation possibilities. Today ERP systems and bookkeeping platforms can automate up to 60% of the bookkeeping, but that number can only increase further as the incoming data is entirely digitised and authenticated. Today one of the most significant challenges for companies is sourcing invoices and orders from third parties.
As you know, a double-entry accounting method records the credit and debit values of a transaction. However, in a triple-entry method, an additional entry is added to the blockchain. All these positive aspects make blockchain technology a great tool to enhance the traditional accounting system. Finally, the introduction of blockchain technology is transforming accounting to another level.
This study provides initial empirical validation and practical insights into under-explored areas at the intersection of sustainability reporting, emerging technologies, and developmental transitions (Section 8). However, conducting replications in diverse contexts could yield more robust and generalizable implications. Addressing limitations through mixed sequential research designs enhances reliability, while contextualized case comparisons contribute to a deeper interpretation of findings.
Dyball and Seethamraju (2021) highlight that auditors consider clients that use blockchain applications as riskier because there is no accounting consensus about how to address their needs. Therefore, the essential benefits perceived by practitioners are unclear but seem to include reductions in time-consuming activities and the need for additional opinions. First, this SLR provides a clear picture of the state of the accounting research on blockchain using how to calculate depreciation expense for business bibliographic and narrative analyses. Second, it investigates how accounting and auditing practices are impacted by blockchain. Third, it contributes to the accounting literature with its discussion of the potential future research trends related to blockchain for accounting. At Deloitte, our people work globally with clients, regulators, and policymakers to understand how blockchain and digital assets are changing the face of business and government today.
