The impact of client use of blockchain technology on audit risk and audit approach—An exploratory study

Dyball, Maria Cadiz; Seethamraju, Ravi

doi:10.1111/ijau.12238

Cited by 22 publications

(5 citation statements)

References 28 publications

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“…Kend and Nguyen (2020) found that auditors are skeptical of the usefulness of blockchain for auditing. Dyball and Seethamraju (2021) highlight that auditors consider clients that use blockchain applications as riskier because there is no accounting consensus about how to address their needs. Therefore, the essential benefits perceived by practitioners are unclear but seem to include reductions in time-consuming activities and the need for additional opinions.…”

Section: Discussionmentioning

confidence: 99%

Blockchain in accounting practice and research: systematic literature review

Bellucci

Bianchi

Manetti

2022

MEDAR

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Purpose This study aims to review the academic literature on the utilization of blockchain in accounting practice and research to identify potential opportunities for further scientific investigation and to provide a framework for how accounting practices are impacted by blockchain. Design/methodology/approach This study is based on a systematic literature review (SLR) of 346 research products available on Scopus, which were mapped with bibliometric analyses and critically discussed in relation to three main topics: the impact of blockchain on accounting and auditing, cryptoassets and finance, business models and supply chain management. Findings Blockchain has many potential implications for accounting practice and research. In addition to providing the state-of-the-art of accounting research on blockchain and additional avenues for further studies, this study discusses why practitioners are interested in this technology: triple-entry bookkeeping, the inalterability of transactions, the automation of repetitive tasks that do not require discretionary choices, the representation of cryptocurrencies in financial statements, value-chain management, social and environmental auditing and reporting and business model innovation. Originality/value The novel contribution of this study is integrated and threefold. First, this SLR provides a clear picture of the state of the accounting research on blockchain using bibliographic and narrative analyses. Second, it investigates how accounting and auditing practices are impacted by blockchain. Third, it contributes to the accounting literature with its discussion of the potential future research trends related to blockchain for accounting.

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Section: Discussionmentioning

confidence: 99%

Blockchain in accounting practice and research: systematic literature review

Bellucci

Bianchi

Manetti

2022

MEDAR

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“…This paper addresses the challenges and opportunities of applying an Open Innovation paradigm in the external audit market. Indeed, the need for technological innovation in this industry has been widely considered in the existing literature, suggesting the use of big data analytics [113], blockchain [114][115][116][117], and even drones [118]. This industry is currently under scrutiny because of the dominance of the so-called "Big Four" oligopoly that has led to poor auditing quality.…”

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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“…These assertions include existence, rights and obligations, completeness, valuation, and (2020), cryptocurrencies' digital nature compromises the efficient testing for each of the mentioned assertions, testing for their existence using the traditional methods of inventory inspection would be insufficient. Apart from the fact that successful cyberattacks may result in a complete loss of cryptocurrencies, which increases the assessed risk of material misstatements concerning the cryptocurrencies account (Dyball & Seethamraju, 2021). The lack of third-party confirmation of the asset makes testing tasks for the existence and completeness assertions more difficult.…”

Section: Auditing Fair-valued Cryptocurrenciesmentioning

confidence: 99%

The Impact of Complex Accounting Estimates and Fair-Valued Cryptocurrencies on Audit Effort – Working Paper

Ali,

Helal

2023

المجلة العلمية للدراسات والبحوث المالية والإدارية‎

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The increasing uncertainties and risks associated with complex accounting estimates, such as fair-value measurements (FVMs) have made no clear-cut line between facts and assumptions. Thus, users perceive complex accounting estimates as less reliable, in comparison to other financial statements' items, which puts a strain on auditors to provide reasonable assurance regarding the appropriateness of these estimates. Additionally, the technological advances witnessed in the current internet era have led to the emergence of new digital assets such as cryptocurrencies. However, the lack of solid specific accounting and auditing standards concerned with the fair-valued cryptocurrencies' issues is putting an extra burden on auditors. Which in turn shows an increase in the nature, timing, extent of risk assessment and audit procedures, compelling auditors to exert additional audit effort. These incremental audit efforts and risks associated are reflected in the auditor's command of fee premium. Accordingly, this paper aims to identify the complex accounting estimates definition and characteristics, emphasizing on FVMs. Moving from this aspect towards the emergence of crypto-assets, such as bitcoins and other fair-valued cryptocurrencies induced by a distributed ledger relying on cryptographic blockchain technology and its effect on auditors' effort indicated by higher audit fees.

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The impact of client use of blockchain technology on audit risk and audit approach—An exploratory study

Cited by 22 publications

References 28 publications

Blockchain in accounting practice and research: systematic literature review

Blockchain in accounting practice and research: systematic literature review

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

The Impact of Complex Accounting Estimates and Fair-Valued Cryptocurrencies on Audit Effort – Working Paper

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