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Blockchain: The Introduction and Its Application in Financial Accounting
Author(s) -
Yu Ting,
Lin Zhiwei,
Tang Qingliang
Publication year - 2018
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.22365
Subject(s) - blockchain , cryptocurrency , accounting , audit , corporate governance , business , ledger , equity (law) , xbrl , confidentiality , accounting information system , information asymmetry , quality (philosophy) , earnings , finance , computer security , computer science , philosophy , epistemology , political science , law
Blockchain, as a decentralized 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. © 2019 Wiley Periodicals, Inc.