Blockchain: Introduction and Application in Financial Accounting

the Journal of Corporate Accounting & Finance (2018)

21 Pages Posted: 15 Jul 2019

See all articles by Ting Yu

Ting Yu

University of Cambridge - Cambridge Judge Business School

Stanley Lin

Shenzhen University

Qingliang Tang

Western Sydney University - School of Business

Date Written: February 19, 2018

Abstract

Blockchain, as a decentralised ledger technology with characteristics of transparent, secure, permanent and immutable, has been applied in many fields such as cryptocurrency, equity financing and corporate governance. However, the blockchain technology is in the experimental stage and has several problems to be solved including limited data processing capacity, information confidentiality and regulatory difficulties. This study sheds light on the potential application of blockchain technology in financial accounting and its possible impacts. We argue that in the short run the public blockchain could be used as a platform for firms to voluntarily disclose information. In the long run, the application could effectively reduce errors in disclosure and earnings management, increase the quality of accounting information and mitigate information asymmetry. We also discuss potential impacts that the application will have on independent auditors and financial accountants.

Keywords: Blockchain, Information Asymmetry, Financial Accounting, Auditing

JEL Classification: D82, G14, M40, O33

Suggested Citation

Yu, Ting and Lin, Zhiwei and Tang, Qingliang, Blockchain: Introduction and Application in Financial Accounting (February 19, 2018). the Journal of Corporate Accounting & Finance (2018), Available at SSRN: https://ssrn.com/abstract=3258504 or http://dx.doi.org/10.2139/ssrn.3258504

Ting Yu

University of Cambridge - Cambridge Judge Business School ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

Zhiwei Lin (Contact Author)

Shenzhen University ( email )

3688 Nanhai Road, Nanshan District
Shenzhen, Guangdong 518060
China

Qingliang Tang

Western Sydney University - School of Business ( email )

Locked Bag 1797
Penrith, NSW 2751
Australia

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