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Blockchain architecture: A design that helps CPA firms leverage the technology

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  • Vincent, Nishani Edirisinghe
  • Skjellum, Anthony
  • Medury, Sai

Abstract

Blockchain technology has garnered the interest of the accounting profession in recent years. However, when considering whether to adopt this technology, many business professionals have voiced a lack of a compelling use case as a major challenge. To utilize the technology effectively, first, we need to establish how organizations will connect to the blockchain that will also provide a compelling use-case for CPA firms. In this paper, we design a blockchain architecture for organizations that will facilitate effective connectivity to a blockchain while enabling auditors to leverage this technology to provide audit and assurance services. To design the architecture, we consider two broad questions: first, how do CPA firms gain access to reliable audit evidence and, second, how can client firms maintain confidentiality and security of their data given a decentralized and distributed immutable ledger (i.e., a blockchain). Consequently, the proposed architecture will help auditors gain access to reliable digital audit evidence while incentivizing client firms to adopt blockchain technology by substantially reducing the costs of replacing existing information systems. Given this architecture, auditors could also design continuous audit procedures for their respective clients without having to incur substantial investments in software integration. Further, the architecture can be expanded to include various use cases and supply chain participants, other CPA firms, customers, and regulators.

Suggested Citation

  • Vincent, Nishani Edirisinghe & Skjellum, Anthony & Medury, Sai, 2020. "Blockchain architecture: A design that helps CPA firms leverage the technology," International Journal of Accounting Information Systems, Elsevier, vol. 38(C).
    • Handle: RePEc:eee:ijoais:v:38:y:2020:i:c:s1467089520300336
    DOI: 10.1016/j.accinf.2020.100466
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    References listed on IDEAS

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    1. Dominique Guegan, 2017. "Public Blockchain versus Private blockhain," Post-Print halshs-01524440, HAL.
    2. Yuanfeng Cai & Dan Zhu, 2016. "Fraud detections for online businesses: a perspective from blockchain technology," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-10, December.
    3. Dominique Guegan, 2017. "Public Blockchain versus Private blockchain," Documents de travail du Centre d'Economie de la Sorbonne 17020, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    4. Jana Schmitz & Giulia Leoni, 2019. "Accounting and Auditing at the Time of Blockchain Technology: A Research Agenda," Australian Accounting Review, CPA Australia, vol. 29(2), pages 331-342, June.
    5. Boon Seng Tan & Kin Yew Low, 2019. "Blockchain as the Database Engine in the Accounting System," Australian Accounting Review, CPA Australia, vol. 29(2), pages 312-318, June.
    6. Dominique Guegan, 2017. "Public Blockchain versus Private blockhain," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01524440, HAL.
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    Cited by:

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    2. Toorajipour, Reza & Oghazi, Pejvak & Sohrabpour, Vahid & Patel, Pankaj C. & Mostaghel, Rana, 2022. "Block by block: A blockchain-based peer-to-peer business transaction for international trade," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    3. Fábio Albuquerque & Paula Gomes Dos Santos, 2023. "Recent Trends in Accounting and Information System Research: A Literature Review Using Textual Analysis Tools," FinTech, MDPI, vol. 2(2), pages 1-27, April.
    4. Ifigenia Georgiou & Svetlana Sapuric & Petros Lois & Alkis Thrassou, 2024. "Blockchain for Accounting and Auditing—Accounting and Auditing for Cryptocurrencies: A Systematic Literature Review and Future Research Directions," JRFM, MDPI, vol. 17(7), pages 1-43, July.
    5. Pizzi, Simone & Venturelli, Andrea & Variale, Michele & Macario, Giuseppe Pio, 2021. "Assessing the impacts of digital transformation on internal auditing: A bibliometric analysis," Technology in Society, Elsevier, vol. 67(C).
    6. Han, Hongdan & Shiwakoti, Radha K. & Jarvis, Robin & Mordi, Chima & Botchie, David, 2023. "Accounting and auditing with blockchain technology and artificial Intelligence: A literature review," International Journal of Accounting Information Systems, Elsevier, vol. 48(C).
    7. Asuman Atik & Goksal Selahatdin Kelten, 2021. "Blockchain Technology and Its Potential Effects on Accounting: A Systematic Literature Review," Istanbul Business Research, Istanbul University Business School, vol. 50(2), pages 495-515, November.

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