Critical Auditors’ Expertise for Blockchain-Based Business Environment

Abstract

The future of work of both external and internal auditors is exciting and promising, as well as, in the same time, threatening and extremely demanding. The exciting and promising part is connected with lots of possibilities for auditors’ professional career developments and specialization, while the threatening and demanding part is directed towards the ongoing demand and need for continuous education and upgrading their knowledge base and skill sets in order to be able to stay up to date with all developments and changes in their and their clients’ internal and external surroundings. Today these surroundings are characterized by big data and usage of information and communication technologies (ICTs), among which the blockchain technology (BCT) is described as the most pervasive and promising one. This paper is primarily driven by the scarcity of literature and conducted scientific researches regarding the specialized educations and expertise that auditors need to attend and possess in order to be able to exist in the blockchain-based business environment. Therefore, the main research objective of this paper was to determine critical external and internal auditors’ expertise that they need to possess in order to be relevant and successful in the blockchain-based business environment. In order to achieve this main objective, desk research and survey research were conducted. Survey research was conducted on a sample of external and internal auditors in Croatia. In general, results of the empirical research showed that both external and internal auditors in Croatia think that they need to possess high level of expertise in advanced analytical procedures (APs) in order to be able to audit blockchain-based business operations. Consequently, this then instantaneously increases auditors’ demand for specialized education in fields of BCT, APs, and data analytics (DAs) in general.

The Internal Auditors’ Perception of Blockchain Technology Implementation in Companies’ Business Activities

“…The BCT has multiple impacts on the internal audit function, as it changes the object and subject of internal audit engagements, the internal audit practices, its tools and techniques, as well as internal auditors' skill sets (Sanglier, 2018;Chedrawi & Howayeck, 2018;Tušek et al, 2018Tušek et al, , 2021aTušek et al, , 2021b.…”

“…Regarding positive sides, BCT increases the effectiveness and efficiency of the internal audit process, allows internal auditors to cover and test the whole population of transactions and focus on testing controls, forges continuous auditing, allows for developing new types of internal audit engagements, all of which enable that internal audit function can play a more strategic role in a company (Chedrawi & Howayeck, 2018;Elommal & Manita, 2022;Han et al, 2023;Lois et al, 2020). Considering negative sides that BCT poses for internal auditing, the most challenging surely represents the need for internal auditors' constant education and training in the technological field of BCT, which significantly raises the costs for internal audit functions, and it is definitely time-consuming (Kloch & Little, 2019;Minnaar & Fisher, 2022;Tušek et al, 2021b;Elommal & Manita, 2022). Furthermore, the transformation of internal audit practices, tools and techniques, as well as function's internal organizational prerequisites, or in other words, internal audit function's adaptation to companies' BCT needs is also definitely a challenge (Kloch & Little, 2019;Minnaar & Fisher, 2022;Tušek et al, 2021a;Elommal & Manita, 2022).…”

“…Scientific and professional empirical research regarding the BCT and internal auditing are still very scarce, but some of them exist globally (Kloch & Little, 2019;Hatane, 2023), and in the Republic of Croatia (Tušek et al, 2021a(Tušek et al, , 2021b, but the themes and topics of these researches are scattered. There is more literature on this topic that can be defined as conceptual or theoretical literature reviews (Sanglier, 2018;Minnaar & Fisher, 2022;Chedrawi & Howayeck, 2018;Han, 2023;Tušek et al, 2018).…”

“…In this paper the focus was on BCT and its impact on companies' business activities as perceived by internal auditors, because this prominent ICT is described as a key game changer or emerging disrupter technology of the future by different authors (Tapscott & Tapscott, 2017;Sanglier, 2018;Kloch & Little, 2019;Blau et al, 2022;Chedrawi & Howayeck, 2018;Spremić, 2018;Xu et al, 2019;Khan et al, 2021;Tušek et al, 2021a;Tušek et al, 2021b;Elommal & Manita, 2022;Manzoor et al, 2022;Yaqoob et al, 2022;Onjewu et al, 2023). Furthermore, internal auditor is in the best position in a company to give the company's governance structure an objective, timely and innovative reasoning regarding this ICT and its impacts on business activities though 'second pairs of eyes and ears'.…”

Navigating the Future: Blockchain’s Impact on Accounting and Auditing Practices

“…Blockchain technology has the potential to also revolutionize the auditing sector by offering a secure, transparent, and automated method of conducting audits. Recent studies [52,53] suggest that blockchain implementation can enhance the speed and effectiveness of auditing procedures. By providing a permanent and unalterable record of transactions, blockchain can help auditors verify the accuracy of financial information and ensure document integrity [54].…”