Premium
The impact of client use of blockchain technology on audit risk and audit approach—An exploratory study
Author(s) -
Dyball Maria Cadiz,
Seethamraju Ravi
Publication year - 2021
Publication title -
international journal of auditing
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.583
H-Index - 21
eISSN - 1099-1123
pISSN - 1090-6738
DOI - 10.1111/ijau.12238
Subject(s) - audit , accounting , audit risk , audit evidence , information technology audit , business , internal audit , joint audit , audit plan , blockchain , control environment , reliability (semiconductor) , external auditor , actuarial science , computer security , computer science , power (physics) , physics , quantum mechanics
Blockchain is claimed to disrupt the external audit function by enhancing the reliability of both external and internal audit evidence. This study examined the impact of client use of blockchain technology on audit risk and audit approach. It referred to the Australian Auditing Standard ASA 315 Identifying and Assessing the Risks of Material Misstatement and van Buuren et al.'s continuum of audit approaches to frame semi‐structured interviews with 28 blockchain stakeholders including audit partners. The study found that blockchain clients are perceived to be riskier than other clients and that inherent and control risks are amplified. The audit approach is not definitive with two likely approaches: a combination of direct, indirect, account‐level and entity‐level evidence and an increase in indirect and entity‐level evidence. This study's findings are useful for audit practitioners, standard setters and regulators.