Chain Bazaar Make it easier for the blockchain to land
Chain Bazaar Make it easier for the blockchain to land
Picture丨From the Internet
Picture丨From the Internet
Editor's Note: The original report comes from Najoua Elommal, Riadh Manita, "Journal of Innovation Economy and Management". Due to the length of this article, we will divide it into three parts: upper, middle and lower. This article is the second. This paper mainly introduces the limitations of the research on the changes brought by blockchain technology to the auditing industry and the discussion on the future. Reference reading: "The next field of disruption: How does the blockchain affect the audit industry?" (Part 1), "The Next Field of Disruption: How Does Blockchain Affect the Auditing Industry? (middle)". Please contact the editor for Chinese reprint.
discuss
discuss
Our findings suggest that blockchain technology will impact the audit profession in at least six key ways.
First, blockchain technology will save time in the collection of certain data and documents that can be automated and controlled, as well as in the substantive testing of transactions. Auditors can use the time saved to bring more added value to clients by enhancing analysis of other risk areas or existing control systems.
Our findings are consistent with those of Liu et al. (2019), suggesting that blockchain technology can help audit firms optimize auditors’ time to perform more valuable work for clients, such as proposing advanced risk forecasts Solutions, in-depth analysis of errors and anomalies in management and control systems. This is also in line with Rozario and Thomas (2019), who state that blockchain technology will transform the audit process and increase its efficiency by automating the flow of data.
Second, blockchain technology will allow auditing of all customer data, not just sampling. This will enable auditors to find most of the errors and anomalies in client systems, thereby improving audit quality. This is consistent with the findings of Liu et al. (2019), which suggest that blockchain technology will allow full coverage of customer data and make audits more relevant.
This result is also consistent with the findings of Kokina et al. (2017), who support the advantage of blockchain technology that it can reflect all abnormalities in the transaction population, rather than generate conclusions from samples.
Third, the blockchain will change the audit process, which will focus more on internal control testing rather than transaction substantive testing. Since blockchain technology will ensure the security of transactions and verify them, thanks to the blockchain community, the auditor can turn his audit work towards a deeper study of the quality of the control systems implemented, such as blockchain The quality of the code, protocol changes, distribution of power between peers, etc. will all significantly increase the relevance of the audit.
This result corroborates the findings of Liu et al. (2019), who argue that blockchain will enhance audit firms’ testing of internal control systems, rather than transactional substantive testing of verification by individual blockchain participants.
Fourth, blockchain technology will allow the establishment of a continuous audit process based on current data, and in real time. By replacing marginal audits based on historical data, this new approach will increase the efficiency and relevance of audits, enabling auditors to become an important player in the blockchain technology adoption process. This audit will allow timely detection of anomalies and errors and systematic improvement of the client's internal control system.
This is in line with Kokina et al. (2017), who state that blockchain technology offers the possibility to perform audits more frequently, or even continuously, since blocks of transactions cannot be modified prior to the audit. This result is also in line with Dai et al. (2019), who demonstrated that blockchain technology can be used by auditors to perform audits and real-time monitoring, thus pushing the industry into a new generation: “Audit 4.0 Era”.
This result is also consistent with Dai and Vasalelyi (2017) and Rozario and Vasalelyi (2018), who argue that blockchain technology not only provides timely access to transactions, but also automates the recording and verification of transactions.
Obviously, the biggest benefit of this approach is the ability to produce reliable and truthful financial statements.
Fifth, blockchain technology will allow auditors to play a more strategic role for their clients. The availability of data and the time saved on other tasks will make it possible for auditors to conduct in-depth analysis of the data and derive relevant and useful interpretations for decision-making, improving efficiency and predicting trends, etc. This analysis and advice to clients is considered by some stakeholders to be a service with little added value, but blockchain technology will enable such services to increase the usefulness and relevance of audits.
Thus, this technology will allow auditors to establish the legitimacy of their important strategic role as a client. These results are consistent with those of Rozario and Thomas (2019), who showed that blockchain has the potential to improve audit quality and reduce the expectation gap between auditors, users of financial statements, and regulators.
Finally, blockchain technology provides opportunities for auditors to expand their business by proposing new services such as real-time auditing, assisting clients in setting up technology or adopting best practices, coordinating blockchain participants, change management, and blockchain management , this result is also consistent with the prediction of Liu et al. (2019), which predicts that blockchain technology will improve new consulting services and thus develop new business for auditors.
For accounting firms to meet the challenge of improving audit processes and offering new services, two prerequisites are essential.
First, audit firms must take the lead and invest heavily in adapting and mastering the technology. This includes recruiting staff with new technical skills, but also acquiring start-ups that specialize in data analytics, working in the blockchain industry, and training existing staff so they can adapt to future challenges. Second, accounting firms must develop a culture of innovation across all business sectors to ensure that their services evolve to meet new market demands.
In addition, the development of blockchain technology, along with the development of the auditing profession, will bring new legislative, regulatory and regulatory issues.
Since auditing is a regulated and standardized business activity, blockchain technology requires lawmakers to adjust regulations to cover technical limitations and access to customer data. In addition, it is necessary to develop new audit standards, especially those covering the audit process (mainly ISA 315, ISA 320, ISA 330, ISA 315, ISA 320, ISA 330, ISA 501, ISA 500), etc. (Manita et al., 2020).
Conclusions and Limitations
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1. Conclusion
The purpose of this article is to study how blockchain technology will affect the audit industry to understand the necessary qualities that auditors must prepare to adapt to the development of the audit industry. This research contributes to papers on the digital transformation of audit firms and papers on blockchain as a specific technology.
This article extends the discussion on the possible impact of blockchain technology on the audit process and the evolution of internal controls in audit firms (Rozario, Thomas, 2019). It shows that the adoption of blockchain technology as a system for processing, storing and communicating information will have a multifaceted impact on the audit industry and open the way for the development of new services.
This study also contributes to enrich the papers on audit quality (Dai, Vasarhelyi, 2017; Manita et al., 2020). Research has shown that blockchain technology can significantly improve audit quality by implementing a continuous audit process, audit testing all company data, and ensuring transaction security for various stakeholders.
Finally, on a practical level, this study informs the industry about the possible impact of blockchain technology on the audit process and advisory services. It has identified five areas where practice must evolve to better meet the needs of audit clients and make audit more relevant.
This study shows that the audit process must evolve towards a continuous audit that focuses not on historical data but on recent data. It should also evolve into an audit process that examines all data, not just a small sample of data. Finally, it must greatly simplify information validation testing and focus more on existing internal control testing and in-depth analysis that provides significant benefit to clients.
The study also shows that blockchain technology will transform the auditor's role from a simple controller to a real strategic advisor who will support companies in developing their business and its information and control systems. This research informs lawmakers and regulators that audit standards, ethics rules, and industry regulatory texts need to be updated to meet the specificities of this technology.
As a result, the auditor profession faces major challenges. Auditors face a market where blockchain technology is increasingly widely used in almost every industry. Therefore, auditors have no choice but to invest heavily in blockchain technology to expand their skills and knowledge in this field and to anticipate and respond to client needs. Otherwise, other companies specializing in digital services will compete with audit firms.
Finally, they can combine blockchain with other technologies (big data, robotics, analytics) and develop new consulting services such as internal control design, assistance in implementing blockchain technology, change management and blockchain governance, and more.
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2. Limitations and future research directions
Our study has certain limitations. First, given our limited sample size (17 participants in the survey), it cannot be more than an exploratory framework. Because our study focuses on one technology, the application of which is not generalized, it is likely that professionals' perceptions of the impact of adoption of this technology on the auditing profession may change.
Furthermore, this study did not address the issue of negative impacts and costs of blockchain technology on the auditing industry. In fact, some authors believe that blockchain technology will have some negative impacts on the accounting and auditing industry and believe that it will disrupt the entire accounting and auditing industry (YeMACK, 2017; Schmitz, Leoni, 2019).
According to these authors, while blockchain technology is a promising technology that can improve trust among different stakeholders, the benefits it can bring to industry and its ability to detect fraudulent transactions remain limited. We fail to examine the possible shifts in careers while we persevere in the face of future challenges.
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