Can Double Entry Principle be Replaced by Blockchain?

A limited amount of academic research that has been conducted on the subject matter rarely mentioned the views to replace the double-entry principle with blockchain. It is pertinent to say that whatever emerges from the blockchain revolution, it is obvious that it played a significant role in the accounting and auditing profession, and could progress faster than expected.

Moving accounting from a centuries-old double-entry system to an automated triple-entry system could mean a massive shift for all parties concerned with the accounting process.

It has been established from the extant literature that blockchain cannot overtake established practices, it is probable that the process still becomes further automated, relevant, truthful, and digitized with normal developments. Despite the benefits offered by such systems, they are too hard to implement, or simply useless on small scale. Similarly, blockchain is noted to be complex and could require large upfront costs, making it unsuitable for many smaller businesses.

While developments are still in early stages, it is noted that the widespread use of blockchain as compared to the double-entry principle is virtually non-existent today.

Researchers and industry giants are considering the use of blockchain to be more effective in the auditing and accounting profession. It has been confirmed that the prospects of blockchain have been reliant heavily not only on auditing practices but also on their acceptance into accounting standards and regulations. To prepare for such developments, future studies may focus on the incorporation of blockchain accounting into legal systems and established accounting standards.

It is established that in our emerging market, demands for professional service are shifting away from the traditional to the digital system.

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It has also established that the traditional skills in the accounting and auditing profession are becoming obsolete. The potential benefits of blockchain in the accounting and auditing profession is also known great to individual and firms. As traditional audits transform or disappear, new opportunities have arisen within the accounting and audit field. This is in line with the idea of Dai and Vasarhelyi (2017), that the triple-entry blockchain accounting system gives auditors instant access to the full population of transactions, in real-time. These features are integrated with smart contracts to generate instant access to new forms and representations of information that have not been possible with traditional ERP databases.

Today, damaging activities are primarily detected in retrospect during an audit. Blockchain has been found to allow for the automatic detection of these in real-time. Hence, the role of auditors may make a dramatic shift from reviewing accounts to development and consulting in the creation of blockchain systems. This can remove dull and redundant tasks from the audit profession and increases the trust in the audit.