The future of audit in the age of blockchain
LE3 .A278 2020
Bachelor of Business Administration
Blockchain is a highly sophisticated form of mathematics and technology, most popular for its decentralized, public, and immutable digital ledger. In 2008, blockchain was introduced to the world as the technology behind the cryptocurrency, Bitcoin. Today, there are hundreds of other applications for the technology, particularly in areas like financial services and supply chain management. Key accounting industry players are currently preparing for the mainstream adoption of blockchain in the assurance practice. This research study seeks to expand on existing literature, by examining how blockchain will modify the audit process and the auditor’s roles and responsibilities. Further, it will explore ways auditors may gain confidence over the blockchain ecosystem. This study interviewed two accounting professionals with extensive backgrounds in audit and/or blockchain. Interviewees were asked several questions to gain insight into their understanding of the technology and its potential impact on the audit world. Additionally, 18 articles published by Chartered Professional Accountants (CPAs) and accounting bodies were used in the text mining portion of this study. Text mining helped the researcher to identify prevalent opinions throughout the articles and establish a working theory. After coding the articles, nine broad themes were established: audit technology, data, system, transactions, process, business, information, services and network. The most interesting finding from the data was that where existing literature praised blockchain for making absolute assurance possible, interviewees were not as optimistic. Both participants agreed that the technology enables auditors to provide a higher quality report but maintained that absolute assurance over financial statements remains out-of-reach. This thesis provides evidence that many of the auditor’s responsibilities will become automated through blockchain, with the focus being shifted to areas that require professional judgement and skepticism.
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