Research shows LDA to be a relevant and useful tool for working with both big and small literature corpora (e.g. Li, 2010; Asmussen and Møller, 2019; El-Haj et al., 2019). Asmussen and Møller (2019, p. 16) highlight that applying LDA to even small sets of papers provides “greater reliability than competing exploratory review methods, as the code can be rerun on the same papers, which will provide identical results”. For these reasons and more, the LDA method is currently one of the most commonly employed topic identification methods that does not simply rely on a static word frequency measure (Blei et al., 2003). Moreover, El-Haj et al. (2019, p. 292) recommend employing machine learning methods and high-quality manual analysis in conjunction as they “represent complementary approaches to analyzing financial discourse”. We followed this advice, applying a hybrid approach that comprised LDA analysis, citation analysis and a manual review.
About Blockchain & Digital Assets at Deloitte
Blockchain enables real-time, verifiable and transparent accounting, making it reasonable to assume that accounting information systems will become ecosystems. In a data ecosystem that progressively integrates a nearly infinite set of initially disconnected revenue recognition principle data, the ability to integrate coherently and apply software agents will be of high importance. With an almost infinite supply of new data, novel methods of measuring business performance will inevitably emerge (Cho et al., 2019). Understanding how blockchain distributes the power of transaction verification and how data are stored and managed to prevent any unauthorised data changes in ecosystems are also key questions in need of investigation. Analysing the role of blockchain in changing business models in different industries is sure to be a topic of great interest to researchers (Johannessen, 2013). The efficiency of new business models in comparison to traditional ones may also bring new insights for academics and practitioners.
Comparative Analysis
Such a provision of information removes transaction level reconciliations and facilitates developing continuous auditing. For auditors, this offers the potential for a transition from a periodical or annual exercise to a continuous matter, one that can now encompass both parties to a transaction simultaneously. Auditing requires the confirmation of transactions and balances on firms’ accounting ledgers at the end of the reporting period due to time-lags, reconciliations, and accounting entries.
Data Availability Statement
As a result of the above, the spectrum of skills represented in accounting will change. In the long term, more and more records could move onto blockchains, and auditors and regulators with access would be able to check transactions in real time and with certainty over the provenance of those transactions. However, the skills required of accountants are likely to change, and there may be a need for fewer entry-level accountants (Kokina and Davenport, 2017; Marrone and Hazelton, 2019). There may be a shift towards notions such as creativity, innovation, holistic thinking, complex decision-making and sense-making. The ability to adapt to keep pace with an increasingly evolving business environment and technological context will also be important.
Additionally, just because a transaction cannot be modified, that provides no assurance that it was entered properly in the first place. Addressing blockchain technology with respect to accountancy (accounting and auditing) will eliminate misconceptions, answer questions and, most importantly, look for the true value that blockchain technology can bring to the accounting world. A large amount of attention and capital currently is being allocated toward virtually anything related to blockchain technology. It is important to examine blockchain first by getting a better understanding of the technology and then examining the accounting and auditing implications. It is also very likely that, in the next few years, more audits will be augmented by cognitive technologies, which confer many of the same benefits and may portend even greater potential than other technologies for the audit. This paper provides a compact snapshot of the state of blockchain papers in accounting research.
- All this will help to improve transparency further and decrease information asymmetry in the market.
- As a result, accountancy is likely to become a much more strategically oriented profession.
- Additionally, more real cases will need to be explored to see how technology might disrupt the auditing community (Marrone and Hazelton, 2019).
- Rather, they suggest that auditing will take on new features and become more complicated (Dai et al., 2019; Issa et al., 2016).
- This has made blockchain accounting a hot topic, especially for those in the accounting profession.
In a triple-entry accounting system, a debit, credit, and a third entry is recorded. Though mainstream adoption isn’t happening any time soon, it’s becoming increasingly important to understand how blockchain technology can change many aspects of tax season preparation as you know it. Whatever your stance, it’s hard to ignore the growing number of organizations accepting cryptocurrency. This has made blockchain accounting a hot topic, especially for those in the accounting profession.
Application of Knowledge Discovery from Data (KDD) in Blockchain and ESG
With the introduction of digital payments came digital receipts, which are easier to tamper. Blockchain’s decentralized nature also helps act as proof that a transaction happened. Gabriella Kusz was a principal, Strategic Initiatives, at IFAC where she supported accountancy’s leadership and innovation in the digital era. If the result is greater or equal to the target value (pattern), the nonce is incremented and the hash is recalculated.