Blockchain technology roles to overcome accounting, accountability and assurance barriers in supply chain finance

Arief Rijanto

Asian Review of Accounting, 2024, vol. 32, issue 5, 728-758

Abstract: Purpose - Know your customer (KYC), accounting standards, issuance, clearing, and trade settlement became the major barrier to implement accounting, accountability and assurance process in supply chain finance (SCF). Blockchain technology features have the potential to solve accounting problems. This research focuses on exploring how blockchain technology provides solutions to overcome the barriers of accounting process in SCF. The benefits, opportunities, costs and risks related to blockchain adoption are also explored. Design/methodology/approach - Multi-case study and qualitative methods are used with a framework based on blockchain role to overcome the accounting process barriers. Ten blockchain projects in SCF and 29 interviews of participants as a unit of analysis are considered. Findings - The findings indicate that blockchain technology offers solutions to solve accounting, accountability and assurance problems in SCF. Validity, verification, smart contracts, automation and enduring data on trade transactions potentially solve those barriers. However, it is also necessary to consider costs such as implementation, technology, education and integration costs. Then there are possible risks such as regulatory compliance, operational, code development and scalability risk. This finding reflects the current status of blockchain technology roles in SCF. Research limitations/implications - This study unveils blockchain's SCF accounting potential, emphasizing multi-case method limitations and future research prospects. Diverse contexts challenge findings' applicability, warranting cross-industry studies for deeper insights. Addressing selection bias and integrating quantitative measures can enhance understanding of blockchain's accounting impact. Practical implications - Accounting professionals can get an idea of the future direction and impact of blockchain technology on accounting, accountability and assurance processes. Originality/value - This study provides initial findings on the potential, costs and risks of blockchain that is beneficial for parties involved in SCF, especially for banks and insurance underwriters. In addition, the findings also provide direction for the contribution of blockchain technology to accounting theory in the future.

Keywords: Blockchain; Supply chain finance; Accounting; Accountability; Assurance; Benefit; Opportunity; Cost; Risk (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-03-2023-0090

DOI: 10.1108/ARA-03-2023-0090

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