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Blockchain Financial Statements: Innovating Financial Reporting, Accounting, and Liquidity Management

Author

Listed:
  • Natalia Dashkevich

    (Department of Computer Science, Brunel University London, Uxbridge UB8 3PH, UK
    All the authors contributed equally to this work.)

  • Steve Counsell

    (Department of Computer Science, Brunel University London, Uxbridge UB8 3PH, UK
    All the authors contributed equally to this work.)

  • Giuseppe Destefanis

    (Department of Computer Science, Brunel University London, Uxbridge UB8 3PH, UK
    All the authors contributed equally to this work.)

Abstract

The complexity and interconnection within the financial ecosystem demand innovative solutions to improve transparency, security, and efficiency in financial reporting and liquidity management, while also reducing accounting fraud. This paper presents Blockchain Financial Statements (BFS), an innovative accounting system designed to address accounting fraud, reduce data manipulation, and misrepresentation of company financial claims, by enhancing availability of the real-time and tamper-proof accounting data, underpinned by a verifiable approach to financial transactions and reporting. The primary goal of this research is to design, develop, and validate a blockchain-based accounting prototype—the BFS system—that can automate transformation of transactional data, generated by traditional business activity into comprehensive financial statements. Incorporating a Design Science Research Methodology with Domain-Driven Design, this study constructs a BFS artefact that harmonises accounting standards with blockchain technology and business orchestration. The resulting Java implementation of the BFS system demonstrates successful integration of blockchain technology into accounting practices, showing potential in real-time validation of transactions, immutable record-keeping, and enhancement of transparency and efficiency of financial reporting. The BFS framework and implementation signify an advancement in the application of blockchain technology in accounting. It offers a functional solution that enhances transparency, accuracy, and efficiency of financial transactions between banks and businesses. This research underlines the necessity for further exploration into blockchain’s potential within accounting systems, suggesting a promising direction for future innovations in tamper-evident financial reporting and liquidity management.

Suggested Citation

  • Natalia Dashkevich & Steve Counsell & Giuseppe Destefanis, 2024. "Blockchain Financial Statements: Innovating Financial Reporting, Accounting, and Liquidity Management," Future Internet, MDPI, vol. 16(7), pages 1-36, July.
    • Handle: RePEc:gam:jftint:v:16:y:2024:i:7:p:244-:d:1431579
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    References listed on IDEAS

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    1. Silvana Secinaro & Francesca Dal Mas & Valerio Brescia & Davide Calandra, 2021. "Blockchain in the accounting, auditing and accountability fields: a bibliometric and coding analysis," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 35(9), pages 168-203, August.
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