Assessing the Impact of Blockchain Technology on Internal Controls Within the COSO Framework

Abstract

Developments in Blockchain technology and their increasing adoption have prompted examination of intersections with organizational internal control systems. Technological solutions leveraging blockchain reportedly enhance operational effectiveness and efficiency, core internal control objectives. Such improvements could increase financial and non-financial reporting reliability and facilitate regulatory compliance. The Committee of Sponsoring Organizations' (COSO) internal control framework provides a systematic methodology for designing and implementing effective controls utilizing blockchain technologies. Within the COSO 2013 framework's context, this study aims to identify risks that may arise from blockchain technology integration into financial reporting processes and outline corresponding control formulations. Specific focal points involve risk evaluation associated with blockchain technology adoption and control implementation proposals addressing identified issues. If properly designed, controls may optimize blockchain technology capabilities for transparent, accountable, and sustainable value generation. This initial examination offers strategic guidance on evidence-based advancement of business-community symbiosis locally and globally through continuous policy evolution. Regional contextualization and adaptability to emerging complexities will determine durability of theoretical edifices established.

Blockchain and Access Control Encryption-Empowered IoT Knowledge Sharing for Cloud-Edge Orchestrated Personalized Privacy-Preserving Federated Learning

“…Blockchain, with its characteristics of being distributed, transparent, autonomous, and immutable, plays a significant role in FL and its application systems according to Ref. [30]. A traditional FL framework typically consists of a single central server and many users (or devices, clients).…”