The Blockchain Technology and its Limitations for True Disruptiveness of Accounting and Assurance
Blockchain is distributed ledger technology praised by many tech-savvy executives to disrupt and change many businesses in the future, including the accounting and assurance profession. This study critically assesses the disruptive potential of the technology for modern accounting information systems and accounting professionals. It summarises limitations and constraints of the technology through qualitative research of academic literature, professional documents and tech websites. The study discusses scalability, transaction costs, interoperability and confidentiality issues as most significant constraints for accelerated adoption and deployment of blockchain based accounting information systems. The economic case of blockchain based accounting information system, real cases of practical implementation and appropriate governance structures are suggested as important areas for future research efforts. The term is combination of two words but is widely used as a combined single word > blockchain. Correction should be made throughout the text
Atanasovski, A., Trpeska, M., and Lazarevska, Z. B. (2020). The Block Chain Technology and Its Limitations for True Disruptiveness of Accounting and Assurance. Journal of Applied Economic Sciences, Volume XV, Winter 4(70), 738-748. https://doi.org/10.57017/jaes.v15.4(70).03
[1] Andersen, N. 2016. Blockchain technology: A game-changer in accounting. https://www2.deloitte.com/content/dam/Deloitte/de/Documents/Innovation/Blockchain_A%20gamechanger%20in%20accounting.pdf
[2] Aranda, D. 2017. Don’t believe all the hype 2: The limitations of the bitcoin blockchain, ripple. https://ripple.com/insights/dont-believe-all-the-hype-2-the-limitations-of-the-bitcoin-blockchain/
[3] Barnes, P. 2019. Crypto currency and its susceptibility to speculative bubbles, manipulation, scams and fraud. Journal of Advanced Studies in Finance, 9(2): 60-77. https://doi.org/10.14505//jasf.v9.2(18).03
[4] Coyne, J.G., and McMickle, P.L. 2017. Can blockchains serve an accounting purpose? Journal of Emerging Technologies in Accounting, 14(2): 101–111. https://doi.org/10.2308/jeta-51910
[5] Dai, J., and Vasarhelyi, M.A. 2017. Toward blockchain-based accounting and assurance. Journal of Information Systems, 31(3): 5–21. https://doi.org/10.2308/isys-51804
[6] Grewal-Carr, V., Marshall, S. 2016. Blockchain - enigma paradox opportunity. Deloitte. https:// www2.deloitte.com/content/dam/Deloitte/uk/Documents/Innovation/deloitte-uk-blockchain-full-report.pdf (accessed August 1, 2020)
[7] Grigg, I. 2005. Triple entry accounting, Systemic, Inc. https://doi.org/10.1007/bf00196791
[8] Haber, S., and Stornetta, W. S. 1991. How to time-stamp a digital document. Journal of Cryptology, 3(2): 99–111. https://doi.org/10.1007/bf00196791
[9] Kiviat, T. 2015. Beyond bitcoin: Issues in regulating blockchain transactions. Duke Law Journal, 65: 569–608. https://doi.org/10.1007/bf00196791
[10] Kokina, J., Mancha, R., and Pachamanova, D. 2017. Blockchain: Emergent industry adoption and implications for accounting. Journal of Emerging Technologies in Accounting, 14(2): 91–100. https://doi.org/10.2308/jeta-51911
[11] Mearian, L. 2019. MIT, Stanford and others to build blockchain payments network to rival Visa Net. Computerworld. https://www.computerworld.com/article/ 3334542/mit-stanford-and-others-to-build-blockchain-payments-network-to-rival-visanet.html
[12] Mezni, M. 2018. Blockchain, and Industry 4.0: A closer look. Decentral Magazine. https://en.decentral.news/ blockchain-industry-4-0/ (accessed August 12, 2020)
[13] Mougayar, W. 2015. Start-up management. A decision tree for blockchain applications: Problems, opportunities or capabilities? https://startupmanagement.org/ 2015/11/30/a-decision-tree-for-blockchain-applications-problems-opportunities-or-capabilities/ (accessed August 13, 2020)
[14] Nakamoto, S. 2008. Bitcoin: A peer-to-peer electronic cash system. Unpublished manuscript. https://bitcoin.org/bitcoin.pdf (accessed April 6, 2020)
[15] O’Leary, D.E. 2017. Configuring blockchain architectures for transaction information in blockchain consortiums: The case of accounting and supply chain systems. Intelligent Systems in Accounting, Finance and Management, 24(4): 138–147. https://doi.org/10.1002/isaf.1417
[16] Ovenden, J. 2017. Will blockchain render accountants irrelevant? https://channels. theinnovationenterprise.com/articles/will-blockchain-render-accountants-irrelevant (accessed June 16, 2020)
[17] Patil, H. 2017. 22 ways that blockchain will change the accounting profession forever. CPA Trendlines. Available at: https://cpatrendlines.com/2017/07/03/22-ways-blockchain-will-impact-accounting-profession/(accessed September 6, 2020)
[18] Peters, G.W., and Panayi, E. 2016. Understanding modern banking ledgers through blockchain technologies: Future of transaction processing and smart contracts on the internet of money. In: Tasca P., Aste T., Pelizzon L., Perony N. (Eds.) Banking Beyond Banks and Money. New Economic Windows. Springer, Cham
[19] Rückeshäuser, N. 2017. Do we really want blockchain-based accounting? Decentralized consensus as enabler of management override of internal controls. Proceedings of 13. International Conference on Wirtschaftsinformatik (WI 2017), St. Gallen, Switzerland.
[20] Schmitz, J., and Leoni, G. 2019. Accounting and auditing at the time of blockchain technology: A research agenda. Australian Accounting Review, 29(2): 331-342. https://doi.org/10.1111/auar.12286
[21] Vaidyanathan, N. 2017. Divided we fall distributed we stand. The professional accountant’s guide to distributed ledgers and blockchain. The Association of Chartered Certified Accountants. Available at: https://www.accaglobal.com/my/en/technical-activities/technical-resources-search/2017/april/divided-we-fall-distributed-we-stand.html(accessed July 3, 2020)
[22] Wang, Y., and Kogan, A. 2018. Designing confidentiality-preserving blockchain-based transaction processing systems. International Journal of Accounting Information Systems, 30: 1–18. https://doi.org/10.1016/j.accinf.2018.06.001
[23] Yermack, D. 2017. Corporate governance and blockchains. Review of Finance, 21(1): 7-31. https://doi.org/10.1093/rof/rfw074
*** ASX. 2018. Chess replacement. Available at: http://www.asx.com.au/services/chess-replacement.htm.
*** CPA Canada and AICPA. 2017. Blockchain technology and its potential impact on the audit and assurance profession. Available at: https://www.aicpa.org/content/dam/aicpa/interestareas/frc/assuranceadvisory services/downloadabledocuments/blockchain-technology-and-its-potential-impact-on-the-audit-and-assuran ce-profession.pdf (accessed May 15, 2020)
*** Deloitte. 2018. Breaking blockchain open: Deloitte’s 2018 global blockchain survey. Available at: https://www2.deloitte.com/content/dam/Deloitte/cz/Documents/financial-services/cz-2018-deloitte-global-blockchain-survey.pdf (accessed September 2, 2020)
*** Forbes. 2018. Crypto currency: can blockchain help brands become GDPR compliant? Available at: https://www.forbes.com/sites/andrewarnold/2018/11/20/can-blockchain-help-brands-become-gdpr-compliant /#18e0adf81203
*** KPMG. 2019. KPMG launches blockchain track and trace platform. Available at: https://home.kpmg/mt/en/ home/media/press-releases/2019/12/kpmg-launches-blockchain-track-and-trace-platform.html,
*** PwC. 2017. Auditing blockchain: A new frontier. Available at: https://www.pwc.com/ us/en/industries/financial-services/research-institute/blog/blockchain-audit-a-michael-smith.html
*** Visa Inc. 2019. Visa Fact Sheet. Available at: https://usa.visa.com/dam/VCOM/global/about-visa/documents /visa-fact-sheet-april-2019.pdf