Ethical and Professional Implications of Blockchain Accounting Ledgers
13 Pages Posted: 24 Feb 2019
Date Written: November 30, 2018
I propose a framework for Blockchain Accounting Ethics. The area of Blockchain ethics in general has been little studied, with no studies on Blockchain Accounting ethics that I am aware of. I have identified the following preliminary areas of ethical concern: Data privacy and security; power and storage usage; issues related to smart contracts; anti-trust; and taxes. There are major problems with the current accounting model that Blockchain will solve. Current accounting records sit on corporate computer systems that are subject to data corruption. Under Blockchain, transactions are verified at the time of transaction with counterparties, resulting in a reliable time-stamp. Accounting policies and estimates can be permanently embedded into the transaction record, making them free of opportunism by management. Once the record is entered, management cannot alter or destroy it, as an infinite number of exact copies exist on the Blockchain. Blockchain accounting will also enable cheap audits by multiple auditors, which is currently prohibitively expensive.
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