Blockchain Technology in Accounting and Auditing

This report evaluates the usefulness of blockchain technology in addressing issues associated with improving the transparency of accounting information. It discusses the current use of blockchain technology in accounting and auditing, how it can improve transparency, its application to WFP donation campaign, and potential challenges. The report concludes that blockchain technology can ensure greater transparency and satisfy donors such as Mr. Musk.

ACCOUNTING SYSTEM
AND ANALYTICS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Current use of Blockchain Technology in accounting and auditing...........................................3
How Blockchain Technology can improve transparency...........................................................3
Application of Blockchain Technology to WFP donation campaign.........................................4
Potential challenges of blockchain..............................................................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
In the present report, it will be evaluated that whether the blockchain technology is useful
in addressing the issues associated with the improvement in the transparency of accounting
information. Also, it will be identified that whether this technology can be applied in the context
of WFP donation campaign or not.
MAIN BODY
Current use of Blockchain Technology in accounting and auditing
Blockchain technology has changed the way in which transactions are initiated, processed,
authorized, recorded & reported. With the help of this technology, the transfer of asset's
ownership can be known well along with maintaining accurate financial information ledger
(Schmitz and Leoni, 2019). Also, whatever obligations are existing within the business can be
clarified well. This technology has made it possible for auditor to not wait for data and
documents to be provided by trading parties as all the transactions are recorded and stored in
blockchain automatically, thus enables companies to record and track their financial transactions
by applying computerized systems.
How Blockchain Technology can improve transparency
Blockchain allows for shared ledger which can be accessed by network members with
prior permission who controls information that each member or organizations can see and the
resulting actions that could be taken by them. Business partners are no longer required to trust
each other with the enhanced security, traceability and transparency provided by blockchain.
In the absence of blockchain, separate database needs to be maintained by each
organizations (Bonsón and Bednárová, 2019). Due to the use of distributed ledger, all the data
and transactions are recorded at multiple locations in identical manner. All participants at
network having prior permission can access to see the identical information at the same time,
thus provides complete transparency to its member. All the transactions in blockchain are
recorded on permanent basis along with stamping it with date and time. Accordingly, members
can view the entire transaction history and virtually eliminates and ensures no scope or
opportunity for fraud to be taken place. In this way, a continuous process of auditing ensures
transparency of accounting and auditing.

Application of Blockchain Technology to WFP donation campaign
The blockchain technology can be applied in the case of WFP donation campaign to ensure
higher transparency demanded by the providers of funds for this programme. As per the
commitment of Mr. Musk, there is a demand for transparency for the use of funds donated (Dai
and Vasarhelyi, 2017). It facilitates open-source accounting with the help of which the public can
see the areas at which the fund has been spent. With the shared ledger, the financial records can
be seen by network members and they can take actions for the fraud or wrong spending
identified.
Potential challenges of blockchain
 Skills needed for its use and operation are limited in supply as it is a newly emerged
technology (Kwilinski, 2019).
 It is a type of ecosystem which require adoption in broader aspect to work in an effective
manner.
 There is a need for huge amount to be invested for applying blockchain technology in
accounting.
CONCLUSION
From the above discussion, it can be concluded that greater and required transparency
could be ensured and achieved by WFP donation campaign to satisfy their donators such as Mr.
Musk due to various benefits offered by this technology.

REFERENCES
Bonsón, E. and Bednárová, M., 2019. Blockchain and its implications for accounting and
auditing. Meditari Accountancy Research.
Dai, J. and Vasarhelyi, M. A., 2017. Toward blockchain-based accounting and
assurance. Journal of Information Systems, 31(3), pp.5-21.
Kwilinski, A., 2019. Implementation of blockchain technology in accounting sphere. Academy of
Accounting and Financial Studies Journal, 23, pp.1-6.
Schmitz, J. and Leoni, G., 2019. Accounting and auditing at the time of blockchain technology: a
research agenda. Australian Accounting Review, 29(2), pp.331-342.