Blockchain: The Introduction and Its Application in Financial Accounting

Abstract

Blockchain, as a decentralized ledger technology with characteristics of transparent, secure, permanent and immutable, has been applied in many fields such as cryptocurrency, equity financing, and corporate governance. However, the blockchain technology is in the experimental stage and has several problems to be solved including limited data processing capacity, information confidentiality, and regulatory difficulties. This study sheds light on the potential application of blockchain technology in financial accounting and its possible impacts. We argue that in the short run the public blockchain could be used as a platform for firms to voluntarily disclose information. In the long run, the application could effectively reduce errors in disclosure and earnings management, increase the quality of accounting information and mitigate information asymmetry. We also discuss potential impacts that the application will have on independent auditors and financial accountants. © 2019 Wiley Periodicals, Inc.

Number of times cited according to CrossRef: 4

  • Umesh Bodkhe, Sudeep Tanwar, Karan Parekh, Pimal Khanpara, Sudhanshu Tyagi, Neeraj Kumar, Mamoun Alazab, Blockchain for Industry 4.0: A Comprehensive Review, IEEE Access, 10.1109/ACCESS.2020.2988579, 8, (79764-79800), (2020).

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  • Michael Rogerson, Glenn C. Parry, Blockchain: case studies in food supply chain visibility, Supply Chain Management: An International Journal, 10.1108/SCM-08-2019-0300, ahead-of-print, ahead-of-print, (2020).

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  • Barbara S. White, Chula G. King, Jonathon Holladay, Blockchain security risk assessment and the auditor, Journal of Corporate Accounting & Finance, 10.1002/jcaf.22433, 31, 2, (47-53), (2019).

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