Businesses are hesitant to introduce blockchain into their accounting practices, despite acknowledging the benefits of the technology.
A QUT study found while survey participants agreed on its efficiency and transparency, they were deterred by blockchain’s complexity and cost of integration into existing accounting systems.
PhD researcher Mohsina Akter said the study, which interviewed experts from three Big Four accounting firms, IT professionals, blockchain experts, senior managers and CEOs, looked at the organisational-level adoption of blockchain accounting.
Mrs Akter said blockchain had been hyped as a game-changer for accounting transactions as it enabled triple-entry accounting and real-time reporting.
“Blockchain enables distributed, immutable ledgers that record and verify transactions as they occur and distribute the same copy of the ledger to participating ‘nodes’ in the network,” she said.
“This creates a chain of accounting records instead of retaining separate records and increases the transparency of information for everyone involved.”
Mrs Akter said blockchain held promise for improving the accounting and auditing processes, however, application of the technology remained limited.
She said participants cited these blockchain benefits:
- Efficiency in the recording process by reducing the reconciliation needed across ledgers, reducing errors and fraud, and enabling instantaneous verification of transactions.
- Providing the same copy of the ledger across the network, bringing increased transparency and reliability of information and trust in the network.
- Traceability and immutability of records make it difficult to manipulate information and facilitate fraud detection.
- Enhanced reputation as an innovative and high-tech firm.
However, Mrs Akter said the participants raised concerns about the integration and interfacing of blockchain with existing accounting systems, involving comprehensive knowledge of the technology and coordination with many diverse parties.
Other barriers to adoption were:
- The high initial investment of education, infrastructure and integration costs and the large computing resources needed for blockchain deployments.
- A lack of understanding of blockchain, the problems it could solve, and the value it could bring to the accounting domain.
- The lack of proven use cases in the accounting domain and limited availability of blockchain-led accounting solutions.
- Concerns over privacy and data security in sharing information on blockchain networks.
