The Impact of Block Chain Technology on Finance and Accounting

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Abstract The Impact of Blockchain Technology on Finance and Accounting Introduction/ Background of Study Blockchain technology is a disruptive digital technology that is causing a paradigm shift in accounting and finance across the world. The need for adoption of key technological changes leads to the constant acceptance of the innovation in different business sectors. Understanding the blockchain technology is important in determining the impact is currently has and would potential have in future. The technology enables the distributed public ledgers that hold data in an encrypted and secure manner and enhances the security of the transactions, such that they cannot be altered. Blockchain has significant characteristics that have made it a critical technology that is gaining interest in the field of accounting and finance. It has a public key encryption which cannot be tampered with. The characteristic is important in proving ownership of assets. Moreover, it is a decentralized distributed ledger that enhances the transparency of the transactions made. It also has a timestamp used to clear transaction order and a network consensus for verifying transaction legality. Based on the characteristics, blockchain technology can be used to transfer information, currency, assets, and data in real time in a cost effective and secure way. It is also instrumental in completing transactions that may need multiple validations. The developers of blockchain technology were keen to ensure that it is easy to detect any fraud transactions and errors through provision of transparent and clear information which cannot be modified after being uploaded. Blockchain technology uses P2P networking that is decentralized; hence, there is no need of o centralized server. The transactions made in the network can be verified from any computer, which makes a centralized authority unnecessary. The individual computers are referred to as nodes and they can access the database and the transaction history from the genesis block (first block). A blockchain consists of blocks that are chained together with

multifaceted computational algorithms. The blocks has information that is tied to each other, which makes it have computational sense. The understanding of the basic of the blockchain technology plays an important role in determining the impact it would have in accounting and finance. Blockchain technology has become a critical development in the information technology field, especially in dealing with financial data. Although crypto currency is the most common use of blockchain technology, elements such as distributed ledger technology is finding its space in accounting and finance. Its usage include data storage, asset management, and financial transactions. The exploration of the extensive use of blockchain technology will help identify the key areas of benefits and challenges in the fields of accounting and finance. Research Objectives 1.Determine whether blockchain technology is effective and can be used in accounting and finance professions. 2.Identify and explain the major benefits and disadvantages of using blockchain technology in finance and accounting. 3.Illustrate the perception of the efficiency and impact of blockchain technology by companies that use it. 4.Describe the potential growth and trends of the blockchain technology and how it is likely to impact accounting and finance professions. Research Questions 1.Can blockchain technology be utilized in the fields of accounting and finance? 2.What are the major benefits and disadvantages of blockchain technology in accounting and finance professions? 3.What is the current perception by the companies that are using blockchain technology of its efficiency and impact in their respective institutions?

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4.What are the trends and future implications of the blockchain technology in the accounting and finance? Literature Review Evolution and Concept of Blockchain The first realistic development and use of blockchain was developed in 2009 by Satoshi Nakamoto in the introduction of Bitcoin, which became the first electronic cash system. The system uses blockchain as a way of monitoring the digital cash transfer. Bitcoin uses the initial technique of blockchain. However, since 2009, there has been significant evolution in the next generation of blockchain that allow the exchange and representation of different information and assets (ALSaqa, Hussein, & Mahmood, 2019). Three generations can be identified in the development and evolution of blockchain. The first generation was the money and cash transfer services such as remittances and payroll. After Bitcoin, there are a hundred of different cryptocurrencies that have been developed with the aim of connecting cash and goods or services. The first generation use of the blockchain was focused on digital property transfer and transactions. The second generation is focused on smart contracts, which becomes more complex compared to the currency role. Smart contracts are aimed at representing mortgages, futures, bonds, shares, and smart assets. The second generation seeks to implement the decentralization of business. Systems that connect different parties in business such as lenders, financial institutions, shareholders, and consumers among others will be connected and decentralized similar to the currency decentralization (ALSaqa, Hussein, & Mahmood, 2019). The blockchain accounting system will helps in creating a contract system that paid invoice and transactions are automatically recorded and executed. The third generation extends beyond the financial markets to include science, culture, architecture, and politics (ALSaqa, Hussein, & Mahmood, 2019). For instance, blockchain

technology is believed would have a significant impact on the voting system to help enhance transparency to promote democracy, freedom, and fair allocation of resources. The concept of blockchain has been defined differently by various researchers based on their outlook and the technical and scientific specialization. Wang & Kogan (2018) states that blockchain is a shared and open online database that protects data from meddling and tracks transaction. The definition is largely based on the first generation evolution of blockchain, which focuses on currency. Rückeshäuser (2017) refers to blockchain as a distributed ledger subtype that acts as a temporal storage and allows for full transparency. It indicates the stability of the information that is stored on the distributed ledger. Researchers argue that blockchain is a real information booklet and it is hard to destroy or falsify. They sum up blockchain as a system that combines operational control, security, and transparency. Orcutt (2018) defined blockchain technology as a system used or storing data in a manner that is hard to copy. Therefore, it can be used for all valuable data. The technology is instrumental in enhancing exchange of resources between parties without the need for a third party. It influences the manner transactions are handled for purposes of accounting, validation, and reporting. Blockchain is believed to have a significant influence on access to information and accountability, which is instrumental in accounting, record keeping, and verification. The common denominator in the definitions of the blockchain technology is that it is used to safeguard data and crucial information in a decentralized system. Blockchain technology is a game changer in the preservation and updating of the financial records. The documents are spread to all the users. It is based on a complex system of validation and consensus to guarantee one accepted version of the financial records. Blockchain Perspective in Accounting and Finance Shyshkova (2018) states that blockchain technology infrastructure can be a vital driving force in accounting activities and standards of control. The current use of blockchain

technology has shown the potential it has in accounting and finance. For instance, it is used as a Bitcoin transaction ledger and it is also an alternative in smart contracts. The application of the ledger technique shows that blockchain has a significant impact on the accounting record keeping. Research indicates that there are critical areas in accounting that blockchain technology has had significant impact; hence, influencing its adoption in the field. Blockchain has been instrumental in designing of accounting information system. ALSaqa, Hussein, & Mahmood, (2019) suggests the adoption of zero-knowledge proof method to develop a system that detects fraud, provides for continuous monitoring, and enhance real- time accounting. It is an approach that can develop a vital system that would address most of the accounting concerns relating to security of privacy. Wang & Kogan (2017) advances the research on the development of accounting of information system to suggest the creation of a free open general ledger. It would be a platform users could register different properties such as real estate securities, shares, and financial assets. It would ensure that there is protection of individual data from interference from any unwarranted parties. The system could also be useful in helping consolidate one’s financial and non-financial assets under one system. Blockchain technology is viewed as an alternative for the conventional bookkeeping in accounting. It is important that companies have an accurate record of its finances, which acts as a guiding tool for investors and shareholders. The use of blockchain technology proves to be a critical tool in accounting since it enhances transparency compared to the conventional ledger. The technology is perceived to have lasting positive impact in reducing the possibility of embezzlement and corruption of assets and company finances. In times of mergers and acquisitions, it is easy to retrieve any financial data with the conviction it has not been altered. Additionally, Wunsche (2016) identifies smart contracts as a critical element in the use of blockchain technology. It can be used in keeping track of performance goals and contracts and at the same time develop efficiency evaluation, performance contracts, and

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performance bonuses. The researcher also argues that the committee accounts and financial statements can be largely automated using blockchain technology. Therefore, it would be easy to track the payments made easily. Firms can use the platform to give investors and shareholders access keys for them to access any financial information anytime. A rapid resolution of any payment would increase the speed of liquidating assets when third parties are involved. The smart contract can also include credit account balances and accounts receivable. Kwilinski (2019) outlines some of the critical benefits that make researchers interested in the impact of blockchain technology on accounting systems. Assurance and immutability improvements are critical benefits gained from blockchain technology that should be incorporated in accounting. Other benefits include reducing manual errors, testing the entire database, continuous auditing and real-time accounting, eliminating reconciliation, and reducing repetitive tasks. Although blockchain is not considered as universally useful in every condition, it has significant solutions in accounting and finance. One of the main concerns that arises is the role of accountants and auditors in future since the blockchain technology is fully automated. Turker & Bicer (2020) argues that there are critical aspects in accounting and auditing that will require professional judgment and assertions. Some procedures such as reconciliation, checking invoices, payrolls checks, confirmation letters, and sampling may become obsolete. It is an advantage since it reduces the costs of operations and also enhances accuracy of the data analyzed. However, there are roles that auditors will have to perform to complement the results from the blockchain technology. Aspects such as fraud detection, predictive audits, risk assessment, and systematic evaluation will remain key functions of professionals despite the automation caused by the blockchain technology (Bonyuet, 2020). In most cases, auditors and accountants are highly likely to focus on non- automated activities. For instance, they can act as advisors and administrators in the

accounting of blockchain information systems. Any new accounting system is subjected to testing; hence, it will be the role of accountants and auditors to ensure that a system meets all the requirements of accounting procedures. Sheldon (2019) points out that the accounting professionals will consider the different elements of a blockchain system. They will check on the right to data access, the risk associated, migration data procedure, protocol for smart contracts, relative power of the participants, and the governance. Research indicates that most auditors and accountants believe that blockchain technology will not replace their role entirely (Tiberius & Hirth, 2019). Therefore, researchers and accounting professionals have similar perception on the benefits blockchain technology will have in the financial sector. The perception that their jobs will not be affected is a critical step in ensuring that the blockchain technology is adopted and implemented in accounting and finance. Advantages of Blockchain Technology on Accounting and Finance ALSaqa, Hussein, & Mahmood (2019) states that real-time accounting is one of the critical advantages of blockchain technology in the field of accounting and finance. The credibility of transfers can be identified through a discovery process and adoption of financial statements can be derived at any time. There are three major characteristics a blockchain must exhibit to perform the role of real-time accounting. They include transparency, stability, and accessibility. Transaction should be visible to users in real-time to enhance transparency of the system. The transparency is important because it creates confidence in the system and the users are aware that the financial information is not interfered with by third parties. A transparent system is a major advantage in accounting and finance since it ensures that the information in the books reflect the true nature of a company. ALSaqa, Hussein, & Mahmood (2019) also point out that stability of the blockchain technology is essential to ensure that there are no programming capabilities that could lead to the modification of the information provided in the system. Accessibility of the blockchain is also a vital advantage. It is usually

readily available to investors and shareholders to access the information they might require regarding financial transaction. All of the characteristics makes it easy to achieve real-time accounting. Shyshkova (2018) in his research identifies the different stages in blockchain implementation that ensure users have honest, complete, and impartial data. The information plays a central role in maximizing objectivity in decision-making. The main benefit identified is the accelerated access of data that enhance decision-making within an organization. Blockchain technology is a fast method in the accounting system. Therefore, when management requires to make any decision that relates to the firm’s finances, blockchain technology would be instrumental. It provides the correct data that enhances objectivity in decision-making; hence, experiencing the best decision outcomes. Additionally, blockchain technology is critical in formalizing control in accounting. Accountants have control of the information provided in the system since it cannot be interfered with. Investors and shareholders also have control since they can access information anytime. Blockchain technology also reduces the cost of accounting regulations. They technology enhances transparency, making it easy for accountants and auditors to meet the set standards and regulations without incurring any additional costs. Most importantly, Shyshkova (2018) argues that blockchain technology improves the quality of accounting. The information provided in the system is accurate and cannot be tampered with, which increase its credibility and quality. Blockchain technology can be integrated in the accounting procedures to maintain document accuracy and audit reports. ICAEW (2017) states that the blockchain technology is distinct from the common ledgers, which makes it effective for use in accounting and finance. The distinct key features include propagation, permanence, and programmability. In regard to propagation, there are different versions of the ledger. The parties involved can access a copy

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of the ledger and any similar copies. There is no individual that has the ownership of the ledger, which makes it easy to release and distribute new payments copies to all the stakeholders. Additionally, the block chain technology allows for permanence. The reality of the different version of the ledger is agreed universally among all parties. Previous transactions cannot be altered without the approval of the majority; hence, ensuring that the documents in the system are irreversible. It is an aspect that enhances transparency and accuracy. Programmability allows the users to store program codes and create entries automatically. It is an important advantage in accounting since it enhances fast entry of data. Moreover, the program stored in the system can monitor and evaluate the data fed into it. Thus, the information cannot be adjusted. The three key features are advantageous in ensuring efficiency in accounting. Lee et al. (2013) states that there are political, economic, social, and technical advantages of using blockchain technology in accounting and finance. The political benefit is that blockchain technology can be viewed by any individual and cannot be altered; hence, enhancing transparency. There is no need of a regulatory party because the trust in the system is high. Therefore, it reduces the cost of regulatory costs in accounting and auditing. The economic advantage is related to the cost of operations. Blockchain technology has led to the automation of critical functions. Moreover, there is lowering of transactions costs and improvement of the transaction completion time. There is no need of third party transaction fees, which reduces accounting costs to a great extent. The social impact is related to user control. Research indicates that the users of blockchain technology can monitor transactions in the system from one location (Harley, 2016). The technical advantage is the quality of accounting standards achieved. The system is decentralized, which makes it easy to be accessed by different users. Additionally, there is a significant protection against fraud since

the security features are excellent (Harley, 2016). The blockchain technology environment (PEST) analysis shows the critical advantages the technology has on accounting and finance. Triple-entry accounting is a vital advantage of the blockchain innovation in accounting and finance. The triple entry bookkeeping procedure has replaced the traditional double-entry, which has had positive effects in accounting (Killi, 2019). The system requires a third party to confirm the transaction between two parties. Previously, a reliable and independent intermediary would be sought after to perform the role. The introduction of blockchain technology has reduces the problem of looking for an independent third party to confirm a transaction. Blockchain assumes the role of the third party through the automation of the verification process. After an accounting entry has been approved, it cannot be destroyed or changed. Vijai et al. (2019) outlines some of the critical features of triple entry accounting. They include tamper-proof record, double entry and cryptography, permissioned distributed ledger, digital signed receipts, and validated, secure and private data. The triple- entry accounting system is a critical aspect that enhances the quality of accounting standards. It has been made affordable, simple, and easy to maintain by the adoption of blockchain technology. Challenges of Blockchain Technology in Accounting and Finance Despite the positive impact blockchain technology has had on accounting and finance, there are negative effects it has on accounting and finance. Technically, most of the accounting software are not compatible with the technology. It is a major challenge because even if a person is willing to incorporate blockchain technology in record-keeping, it becomes hard due to non-compatibility. The adoption of blockchain would require the development of customized user interface. Customized user interfaces would be expensive, which would hinder massive adoption in the accounting field. Since technology is dynamic, there will be need to create cost-effective solutions to reduce custom-designed blockchain.

Performance is also identified as a critical disadvantage that affects the efficiency of blockchain technology. The blockchain technology does not support the technology used currently in finance and accounting. Based on the nature of the technology, it is expected to be slower compared to central databases. While performing a transaction, blockchain technology performs the same things as a normal database but it has additional loads that makes it slower. For instance, it has signature verification. Each transaction must be digitally signed, which is a process that creates primary congestion based on its numerical complexity. Moreover, the blockchain technology must adopt reconciliation mechanism to ensure that all the nodes in the system have an agreement. The technology has to perform over plus workload. A central database performance a transaction once or twice. In a blockchain, each node in the network is processed independently, which is much work to get to the same outcome. The legal compliance and obligation is also a major challenges that faces the adoption of blockchain technology. There are limited regulations that determine how the technology should be used in finance and accounting. Currently, there is limited legislation that guides how the technology should be used and to what extent it is acceptable. The legal gap creates a concern about the technology’s future and whether it will be accepted by various governments. Additionally, the use of the technology makes it hard to determine the actual costs associated with it. It is true that elimination of intermediaries help in providing cost advantage. However, the true cost of implementing blockchain technology in finance and accounting has not been identified, which makes it difficult to determine the cost-benefit aspect of the adoption. Blockchain technology has a longer wait time in the approval process. It is a disadvantage when there is need for faster approval of transactions. Moreover, it has a high data size, which is a potential problem in efficiently managing data. Additionally, blockchain

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technology is new and there is limited evidence whether the expected yields from the system have been achieved. As a developmental technology, there are many challenges that ought to be addressed to ensure that its intended purpose is achieved. For instance, there is dire need to resolve issues such as verification process, speed of transaction, and data limits. The identified challenges facing blockchain technology should be addressed effectively to ensure that the intended purpose of the technology is achieved. Potential Impact of Blockchain Technology on Finance and Accounting Blockchain technology has potential based on its constant adoption in finance and accounting. Digital transformation is being experienced in all areas, and finance and accounting are no exception. The massive adoption of new accounting technologies proves that the profession is ready and willing to use the latest innovations in their respective roles. Nixon (2016) points out that new technologies are assisting accountants to be actively involved in the continuous operations of their clients. Blockchain technology is one of the critical new technology, hence, accountants must seek to understand what positive impact it will have on the profession. According to Kokina, Mancha, & Pachamanova, (2017), blockchain technology came into prominence due to its constant usage in financial markets and offering solutions to a wide range of business functions. The technology has significant prospects for the future since it is ready to convert contracts, payment transactions, invoicing, and documentation. Blockchain will have a potential impact as a digital ledger in recording transactions chronologically. It will be a reliable tool that will ensure continuous updating of a company’s accounting records. However, despite the major benefits the technology is likely to have on accounting and finance, the major question is whether it will be a threat or opportunity for the accounting profession. It is believed that blockchain technology is aimed at reducing human interaction in accounting function, hence, enhancing accuracy and reducing costs. Could accountants be reluctant in adopting the technology based on the

assumption it is likely to negatively impact their profession? If there is such a perception, it can hinder the successful implementation of the technology in accounting and finance. Blockchain technology has proved it aims at ensuring improvements of accounting and finance functions in companies. It is difficult to currently measure the effects on the technology. However, it is expected that it will increase accuracy in financial reporting, ensure large cost savings, and reduce the risk of fraud (Hambiralovic & Karlsson, 2018). Such potential effects will help in improving the quality of audits and as a result facilitate the growth of accounting and finance professions. The opinion of an auditor is important in helping investors make critical decisions. Therefore, it is vital to ensure that the auditing process is transparent and accurate. Blockchain technology has been developed to achieve transparency and accuracy in the accounting systems (Kokina, Mancha, & Pachamanova, 2017). It is a potential impact that will have a positive impact in the reliability of audit reports. For instance, the blockchain technology ensures that each transaction has a time stamp and it cannot be deleted from the system. It is a provision that would ensure that there is no alteration of financial information from the record books, hence, the opinion provided by the auditor is devoid of any erroneous data. In the future, adoption of the technology will be instrumental in ensuring automated auditing processes. The blockchain technology will substitute the auditor and provide the necessary verification of data in a format that can be used by investors. Research Methodology The research methodology outlines the research design and the method used to collect data used in the study. The research used secondary research since the area of blockchain technology has not been explored adequately. Research Design

The research design of the study is exploratory aimed at providing comprehensive insight on the impact blockchain technology has on accounting and finance. Exploratory research is conducted for a research problem that does not have sufficient information. Based on the literature review conducted, it is evident that the impact of blockchain technology in accounting and finance are not fully understood. Although there has been research outlining some of the major benefits the technology is expected to have in the respective areas, there is no substantial information from companies that shows the extent of its benefits. Most of the research on the blockchain technology have focused on cryptocurrencies, cryptanalysis, and cryptography. The areas related to private blockchain and smart contracts have not been explored adequately. The use of exploratory research design in this study will help in exploring the topic further to identify the perceived benefits of the blockchain technology in improving finance and accounting practice. In conducting the exploratory research, a detailed literature review was done to collect information and data that would adequately answer the research questions. A literature review is a systematic method of collecting and analyzing data from the existing researches on the topic. It is one of the widely accepted research methodologies, especially where secondary data is concerned. When literature is reviewed systematically, it provides an overview of the topic. When different conclusions from the researches are combined, they provide enough information that would be used to answer the research questions effectively. The most popular method of conducting a literature review include integrative, systematic, and semi- systematic. The method used should be based in the research objectives. In this research, the systematic approach will be used to ensure that the most relevant research articles have been identified and used for the study. The results from the literature review is based on the author’s conclusion in the original work. The conclusions are systematically analyzed to address the research questions. The literature review is divided into data collection and

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analysis. Data is collected using search strings and keywords. Additionally, there are outlined inclusion and exclusion criteria that are aimed at facilitating the search for relevant articles that will answer the research questions. The research papers are evaluated and the most relevant selected for analysis. The conclusion of the selected articles are analyzed and synthesized to be used to answer the research questions. Data Collection Data collection is the most important part of the exploratory research. It ensures that the relevant data is that matches with the research question is identified. Choosing the right database and proper keywords is instrumental in ensuring high quality of the research results. Different combinations are critical to determine the relevancy of the articles obtained. The database used to obtain the articles were Google Scholar and Springer Open. It is a platform that has a wide range of scholarly materials on different topics. Additionally, it is easy to use and articles can be sources freely. In the search process, different search strings and keywords were entered to get the most relevant articles. The table below outlines the keywords, databases, and search strings used: Table 1 Keywords “Blockchain”, “blockchain technology”. “impact of blockchain”, “finance”, “accounting”, “blockchain and accounting”, ‘blockchain and finance”, blockchain and auditing”, ‘financial sector” Databases Google Scholar, Springer Open Search String “blockchain OR blockchain technology”, AND “impact OR effect”, and “accounting” OR “finance” OR “auditing” Inclusion and Exclusion Criteria Elaborate inclusion and exclusion criteria are important to help in getting the specific data that matches the research questions. The results from a normal search would provide many options; hence, there is need to develop a criteria that will eliminate articles that do not

provide the required information. One of the most basic criteria used in the search for the research articles is date of publication. The research sought to use the latest studies that have been conducted in the past 5 years. Articles that were published beyond 2017 were eliminated as sources of information for this study. The use of latest articles would be of great significance in ensuring the latest blockchain innovations have been considered in determining their impact on accounting and finance. The table below outlines the inclusion and exclusion criteria used in searching for the most relevant research articles. Table 2 Criteria for Inclusion Criteria for Exclusion Peer-reviewed articles Literature that is not scholarly such as blogs, websites, and online articles Articles related to blockchain impact on finance, accounting, or auditing Papers that focus on the technical aspects of blockchain and cryptocurrencies The article is available in full text Only abstract is available Free access papers Purchase needed Papers published from 2017 to present Papers published before 2017 Searching and Selection of Articles The search and selection of articles is the most critical stage in data collection. It determines whether the articles identified are relevant and will help in answering the research questions. After applying the inclusion and exclusion criteria, the articles were evaluated individually. The process aimed at ensuring that the articles chosen had all the necessary information needed for analysis. After an articles was identified, the abstract and content was read to determine its eligibility or use in the study. The limitations of the study was also identified to understand the gaps that could influence the conclusion made. Articles that had specific examples from companies that have used blockchain technology were preferred because they had firsthand information on how the forms have benefited from the use of blockchain technology. During the search, duplicate articles from the databases were

eliminated. A minimum of four articles per research question were selected to provide a wide range of information. Data Analysis The last step of the exploratory research is data analysis. The collected articles were analyzed to answer the research questions adequately. The articles were studied and data was extracted systematically. The extraction of data was aimed at answering the research questions directly. Therefore, the articles were categorized based on the specific research questions they were aimed at answering. Data was systematically extracted based on the conclusion the authors made regarding a specific research query. The analysis was categorized using the research question. It was an easy and convenient approach to help identify all the different viewpoints on the topic. The criteria was also useful in making it easier to deduce the research answers and develop a comprehensive conclusion in the research topic. Findings and Discussion 1.Can blockchain technology be utilized in the fields of accounting and finance? The first area that the research focused on is determining whether blockchain technology can be utilized in accounting and finance. The research sought to identify the key areas that the technology is expected to be utilized in accounting and finance. Yu, Lin, & Tang (2018) argue that that blockchain technology can be utilized as a platform for firms to disclose information voluntarily. In the long-term, the authors state that the technology could be effectively reduce errors in earnings and disclosure management, mitigate information asymmetry and increase the quality of accounting information. As a decentralized ledger technology, blockchain has the characteristics of secure, transparent, immutable, and permanent system, hence, it is effecting in enhancing trust between the key stakeholders. The application of blockchain technology in accounting and finance is

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progressive. Companies can use the technology to solve the trust problem with outside users. Smart contracts is an element that is expected to help reduce errors and provide a timely and comparable accounting information. Listed companies need to constantly disclose financial statements. In the current auditing systems, there is a possibility that insiders may seek to maximize their interests. Consequently, they may manipulate accruals, disclose false information, and construct transactions. Outside user are not able to observe the accounting process and the true transactions that take place. Blockchain technology can be utilized to address the problems of transparency since users can view the transactions through the technology that are tamper proof. Demirkan, Demirkan, & McKee, (2020) outline the current and potential use of blockchain technology in accounting. That authors state that blockchain technology can be utilized in the auditing process. When using the system, auditors would experience data reliability transaction transparency, and data security. After the audit process, the auditor’s opinion usually have a margin of error. The adoption of blockchain technology would help in addressing the error in auditing process. Blockchain provide evidence used in auditing. The evidence is secure and accurate since it cannot be tampered by third parties. The auditors would have reduced workload since the blockchain system extracts all the financial data needed to complete the process. It reduces the amount of work of an auditor since most of the process is automated. Blockchain transactions are credible, difficult to alter, obvious, complete, and has evidence of approval. The technology presents a great opportunity in the accounting process since it is transparent, accurate, and traceable. Additionally, blockchain technology can be used in implementing big data. Accountants can use blockchain technology to organize big data. Big data is important in the development of different control systems and improving the quality of financial reporting.

Al Kemyani et al. (2022) in their research provides a wide range of application of blockchain technology in the banking sector. It can be utilized in financial applications such as smart contracts, Bitcoin, and hyper ledger. Moreover, there is a trading system that use blockchain technology and it has significant impact in finance and accounting. It provides different payment systems such as payment clearing, e-commerce transactions, and cross-border payment. In its use in cross-border payment, blockchain technology enables individuals, enterprises, and international banks to conduct peer-to-peer financial transactions. The improvements of the payments systems is important because it ensures there is high level transparency and security of the transactions completed. Additionally, blockchain technology can be used in improving the efficiency of financial services and enhance the liquidity of financial instruments. Moreover, blockchain technology can be used to build decentralized systems. In the financial industry, blockchain technology seeks to facilitate transparent and borderless decentralized financial services. The system is important because it reduces transaction costs and it better organizes modern finance. The system creates trusts compared to centralized systems, which makes blockchain technology a critical system for use. The use of blockchain technology in those areas is aimed at enhancing financial efficiency. 2. What is the current perception by the companies that are using blockchain technology of its efficiency and impact in their respective institutions? 3. What are the trends and future implications of the blockchain technology in the accounting and finance? Conclusion

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References ALSaqa, Z., Hussein, A., & Mahmood, S. (2019). The impact of Blockchain on accounting information systems. Journal of Information Technology Management , 11(3), 62-80. Bonyuet, D. (2020). Overview and impact of blockchain on auditing. International Journal of Digital Accounting Research , 20, 31–43. Harley, A. (2016). Israel: A hotspot for blockchain innovation. Deloitte . Retrieved from https://www2.deloitte.com/content/dam/Deloitte/il/Documents/financialservices/israel _a_hotspot_for_blockchain_innovation_feb2016_1.1.pdf ICAEW (2017). Blockchain and the future of accountancy . Information Technology Faculty, London. Retrieved from www.icaew.com . Killi, M. (2019). Effects of blockchain technology on accounting and auditing profession. Retrospect & Prospect , 405. Kwilinski, A. (2019). Implementation of blockchain technology in accounting sphere. Academy of Accounting and Financial Studies Journal , 23(Special Is). Lee, S., Chae, S. H., & Cho, K. M. (2013). Drivers and inhibitors of SaaS adoption in Korea. International Journal of Information Management , pp 429-440. Orcutt, M. (2018). Block chain. MIT Technology Review , 121 (3), 18-23. Rückeshäuser, N. (2017). Distributed ledgers for the prevention of accounting fraud: Blockchains between expectations and reality . PhD Dissertation, Albert-Ludwigs- Universität Freiburg. Sheldon, M. D. (2019). A primer for information technology general control considerations on a private and permissioned blockchain audit. Current Issues in Auditing , 13(1), A15–A29. Shyshkova, N. (2018). Prospects for the implementation of blockchain in accounting. Accounting and Finance, 2, 61-68.

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The Impact of Block Chain Technology on Finance and Accounting

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