Audit of Budget Programs in European Union Countries

Hnydiuk, Inna V.; Даценко, Ганна; Krupelnytska, Irina H.; Кудирко, Олена; Prutska, Olena O.

doi:10.13189/ujaf.2021.090430

Cited by 1 publication

(1 citation statement)

References 13 publications

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“…This industry is currently under scrutiny because of the dominance of the so-called "Big Four" oligopoly that has led to poor auditing quality. As the regulators are now designing and implementing relevant laws and measures to ensure public trust [119][120][121][122][123] by improving quality and transparency, this research can be considered timely in suggesting a new pathway driven by an Open Innovation approach [124].…”

Section: Discussionmentioning

confidence: 99%

Is Permissioned Blockchain the Key to Support the External Audit Shift to Entirely Open Innovation Paradigm?

Faccia

Pandey

Banga³

2022

Journal of Open Innovation: Technology, Market, and Complexity

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Open Innovation (OI) models have been studied in many fields. However, the challenges and opportunities of a possible OI paradigm application in external auditing have been under-researched. Recent corporate scandals are currently triggering changes and improvements in the regulatory framework by targeting, in particular, the dominance of the so-called “Big Four”. The main research question is whether a permissioned blockchain ecosystem could better enhance an OI paradigm and prove more suitable than the Semi-Open Innovation (SOI) paradigm that currently shapes the external audit field. Some challenges are considered in this article. Notably, blockchain requires suitable legal frameworks to ensure legally binding transactions. Moreover, multidisciplinary teams and high investments are required to develop efficient blockchain ecosystems and exploit the power of data analytics. Systematic analysis is performed based on a relevant literature review, along with abductive reasoning and applied modelling methodologies. The analyses demonstrate that the current Semi-Open Innovation external audit model is inefficient because it has led to market concentration, conflicting interests, and even fraud. Therefore, the regulators’ role in promoting fully Open Innovation models in the audit industry is essential to ensure transparency, information sharing, fair competition, innovation, and collaboration among audit professionals. Hence, this research aims at providing a different perspective by focusing on the necessary assumptions needed to ensure successful application of technologies in the audit field. The innovative introduction of a permissioned blockchain-based audit system is also suggested to ensure the feasibility of the shift from Semi-Open to Open Innovation.

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