Blockchain in Accounting Assignment | Online Homework Help

please edit this essay and proof read it and also answer this question (How will the accounting profession change because of blockchains?) no more than 5 pages please use relevant sources and no plagiarism

Ali Alhammadi

ACC406

Prof. Friedman

Blockchain in Accounting

Blockchain can be described as a technological way of selling properties and keeping behind a proper record that can be used for future reference. The technology is used to make estimates and communicates about financial information alongside the analysis. Blockchain plays an important role in ensuring that there is efficiency and accountability when handling cash (Kiviat 569). Many businesses around the world use blockchain technology to make a major transaction like the transfer of ownership. It allows for more record keeping by holding a bulk of information. This research paper will look into the business knowledge that is entangled with technology to maximize efficiency in terms of record keeping of transaction.

Introduction

Blockchain technology is used by business people to make legal transactions online. It provides a suitable platform for accountability and promotes businesses. Blockchain has unique features and, therefore, cannot be compared to the regular ledgers. The technology can further be subdivided into propagation, performance, and programmability (Swan 1). This is evident from the fact that technology involves the use of databases which can only be operated by one party of the transaction.

Propagation means that there are a lot of copies of the ledger and does not depend on the master copy. Both parties in the transaction will have control over them (Ruckershauser 2). When more recent ledgers are posted on blockchain every person will be supplied with a copy. Permanence, in this case, means that the information contained can be accessed anytime and data cannot be easily lost. Any changes done on the databases are easily traced back and the ledgers are inspected from time to time. Programmability in blockchain means that the program codes used in this technology could be kept like the ledger entries. This implies that the application allows for the automation of the programs. It gives directions of how things should be done and performs self-audit on all the ledger entries. Blockchain technology helps to reduce the cost and time that could be used to close the transactions.

Literature review

The article by Dai et al, (5) defines blockchain as a modern way of distribution of ledger to the intended recipients. The technology was invented in order to reduce paperwork and increase accountability in the accounting field (Brandon 34). This means that the business people who were stealing money from the other parties have no chances since the ledgers are directly sent to individuals when a transaction occurs (Dai et al, 7). Bitcoin is one of the recent ways of making online payments. It employs the technology that was developed using blockchain. Bitcoin was invented in 2009 in an effort to reduce the involvement of the central bank in the transactions (Kiviat 569). It was a suitable alternative to make payments that are not traceable. The role of the central bank was, therefore, decentralized since cryptocurrency took over. The functionality of this technological application is explained by the ethereum white paper (Coyner et al 102). The blockchains are further subdivided into private and public blockchains. This depends on the number of people that are authorized to access the ledgers; private blockchains suffer from the risk of security compared to the public ones because they depend on only one party (Iansiti et al 119). The technology has allowed for the quick transfer of ownership of properties because of increased trust, less chance of fraud and reduced cost compared to when the traditional ways are used.

Research methods

The research employed the use of secondary sources as the main source of data collection. The use of previous articles would help to establish how blockchain can be used in accounting to increase accountability and efficiency in the field. This method was more appropriate because the information provided in the articles is more reliable and timely. The information collected from the journals would be analyzed critically to ensure that they present current and reliable information that is not duplicated from other articles. This would help to ensure that the results are more accurate and give the real picture of how blockchain has impacted the world of business, specifically in accounting. The research will be based on analyzed data that is

Research findings

From the data collected from the online journals and articles, blockchain is a ledger that is programmable and allows for flexibility which helps to mediate a vast part of the finance system., The organizations that use blockchain technology benefit in a big way. The technology helps businesses to develop trust in their operations because the information is not recorded in the ledger but the databases. The application can be used at a personal level and this way it reduces the need of visiting the banks more often. The application is used in accountancy to reduce the level of fraud that has been highly reported in recent times. Both parties that are involved in the transactions will be able to benefit because the extra charges on ledger costs are reduced. When blockchain is used in accountancy it helps the individuals to make the decisions easier and within a short period of time. The respective governments also benefit from the application because they are usually granted with the permission to oversee the transaction using the read-only access. This way the governments will be able to ensure that the business people are compliant to the rules and regulations.

Discussion

From the results obtained it is apparent that the reduction in the cost of ledgers implies that the functionality will be streamlined and gives way for easy decision making. The application reduces the unnecessary costs that can be incurred when the regular ledgers are used. This is an added advantage for the business people because accountability is guaranteed (Iansiti et al 120).  The application provides a platform that is used in the financial systems to help individuals to transact without the fear of fraud.  The users are guaranteed that every move in the blockchain is reported to them. blockchain helps the investors to make better decisions when it comes to financial matters because of the self-audit that is done by the application (Dai et al 11). The users are also sure that important information is stored for a long time. There is no master copy when it comes to using the application. This means that the information on the databases is secure and cannot land in the wrong hands unlike when the regular ledgers are used.  The application also helps in terms of giving directions and balancing of the ledgers. It reduces human labor that is exposed to inaccuracy and fatigue. Bitcoin is one of the cryptocurrencies that is used for an online transaction. It uses the technology that was developed using blockchain (Kiviat 569). Bitcoins gave business people the opportunity to transact more businesses using this trusted method of payment.

Conclusion

In conclusion, blockchain guarantees transparency and gives a fair ground for transactions without fraud. The information that is provided by the online ledger helps to reduce the errors and guarantees the privacy of documents. The application uses high technology that has helped to replace bookkeeping records that took a lot of space. This development has also helped the business people to develop more trust in one another because the chances of fraud are reduced. The staffs working in these departments are likely to lose their jobs but this move is important to the organizations because it guarantees value addition. All the other departments are put to notice because in accountancy the information presented to the customers is accurate and more reliable. Automation of machines using the blockchain technology has allowed for more transactions within a short time because the application does not suffer from fatigue. The application has also made it possible for the reconciliation of banks. Many of the banks around the world were suffering from huge losses because the regular ledges were hard to balance and consumed a lot of time. Interbank transactions were made possible using this technology. Blockchain has helped to revolutionalize the nature and transparency in accountancy. External auditing has been made easier because of the advancement of technology.

Works cited

Brandon, Dan. “The blockchain: The future of business information systems.” International Journal of the Academic Business World 10.2 (2016): 33-40.

Coyne, Joshua G., and Peter L. McMickle. “Can blockchains serve an accounting purpose?.” Journal of Emerging Technologies in Accounting 14.2 (2017): 101-111.

Dai, Jun, and Miklos A. Vasarhelyi. “Toward blockchain-based accounting and assurance.” Journal of Information Systems 31.3 (2017): 5-21.

Iansiti, Marco, and Karim R. Lakhani. “The truth about blockchain.” Harvard Business Review 95.1 (2017): 118-127.

Kiviat, Trevor I. “Beyond bitcoin: Issues in regulating blockchain tranactions.” Duke LJ 65 (2015): 569.

Rückeshäuser, Nadine. “Do we really want blockchain-based accounting? Decentralized consensus as enabler of management override of internal controls.” (2017).

Swan, M. E. L. A. N. I. E. “Blockchain economics: Ripple for ERP.” European Business Review (2018): 1-4.