Blockchain technology has been a disruptive force in currency, supply chain, and information sharing practices across a variety of industries. Its usage has only recently expanded into assurance and financial reporting. This paper explores blockchain's impact in these areas and provides guidance for organizations and auditors utilizing blockchain by addressing financial data integrity issues, financial reporting risks, and implications for external auditors and firms' corporate governance practices. Organizations utilizing blockchain must adapt their policies and procedures over internal controls and counterparty risk assessment to address increasing regulation over the distribution of financial data, while their audit committees must be prepared to address these challenges leading up to financial statement preparation. External auditors need to assess blockchain implementation as a financial reporting risk and balance the potentially more reliable and timelier audit evidence obtained from blockchain-based reporting systems against the related increase in internal control testing.
Perceived price volatility of cryptocurrencies may distract practitioners from further developments in the blockchain space that may generate audit and other implications. As next step applications and developments are built on top of existing blockchain programming, the potential implications for both accounting and legal practitioners may be substantive. Especially as different blockchain tools and platforms become more robust and conducive for business and transactional use, the importance of being able to attest and report on this information will move closer toward the mainstream. This article discusses the rise of blockchain applications in a manner applicable for both practitioners and academics, as well as the implications these applications will have on attestation and compliance reporting.
Technological forces, including but not limited to blockchain and artificial intelligence platforms, are driving change not only in the accounting profession, but business at large. In a business environment where data is produced nearly continuously, and stakeholder groups expect an increasing variety of information, current accounting processes do not appear sufficient. This research examines and applies current market forces, linked to both technology, including an analysis of both blockchain and artificial intelligence, and the increased influence of stakeholders on the reporting process, to do the following. First, an analysis of items to consider and review as the shift toward more continuous accounting and reporting begins is postulated. Second, and arguably more important for the combined practitioner and academic audience this research is intended for, implications and applications of more continuous accounting are put forth to assist as individuals and organizations embrace this transformative process.
Blockchain technology has been a disruptive force in currency, supply chain, and information sharing practices across a variety of industries. Its usage has only recently expanded into assurance and financial reporting. This paper explores blockchain's impact in these areas and provides guidance for organizations and auditors utilizing blockchain by addressing financial data integrity issues, financial reporting risks, and implications for external auditors and firms' corporate governance practices. Organizations utilizing blockchain must adapt their policies and procedures over internal controls and counterparty risk assessment to address increasing regulation over the distribution of financial data while their audit committees must be prepared to address these challenges leading up to financial statement preparation. External auditors need to assess blockchain implementation as a financial reporting risk and balance the potentially more reliable and timelier audit evidence obtained from blockchain-based reporting systems against the related increase in internal control testing.
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