Blockchain: Introduction and Application in Financial Accounting
the Journal of Corporate Accounting & Finance (2018)
21 Pages Posted: 15 Jul 2019
Date Written: February 19, 2018
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: Suggested Citation